The purpose of this assessment is to review a few scenarios and identify the typ
ID: 1191781 • Letter: T
Question
The purpose of this assessment is to review a few scenarios and identify the type of unemployment applicable in each scenario. Discuss what type of unemployment qualifies each scenario. Based on your responses, discuss why the other types of unemployment do not qualify for these scenarios. Support your responses with appropriate rationale. Scenario 1: John is an IT graduate and has a rich experience in Windows XP application dev elopment. Due to Microsoft’s decision to discontinue Windows XP, John is out of his job and is unemployed. Scenario 2: Christina works as a nurse with a well - known hospital in Carmel. She is getting married next month, March. After marriage, Christina has to move to Florida. Christina, to ensure that she has a job when she moves to Florida, approaches a hospital in Florida to seek employment. Christina is selected for the job; however, she can join in the first week of April as per the appointment letter. C hristina gets married in the first week of March and stays unemployed until the first week of April. Scenario 3: In the middle of Easter holidays, Venice gets flooded with tourists. The number of gondoliers and the drivers of gondola increase during this p eriod. For rest of the year, they stay unemployed or search for another temporary job. Scenario 4: The number of IT projects the U.S. organizations outsourced to Indian IT organizations reduced during 2008 – 2010. Majority of the Indian IT companies laid of f their employees due to the declining revenue.
Explanation / Answer
Scenario 1 is characterised as a case of structutal unemployment.Structural unemployment occurs when the structure of economy has changed but the skills of workers have not adjusted accordingly.There is no longer demand for existing skills of a worker.The worker remains unemployed because there is no longer demand for a certain type of workers.Overhere John has a rich experience in windows XP but the economy no longer requires his services because it has closed down the services of WINDOWS XP.It cannot be cyclical unemployment because cyclical unemployment occurs due to regular ups and downs in the economy.It occurs when the whole economy moves into recession.
Neither can it be seasonal unemployment because seasonal unemployment is an unemployment occuring during a particular season of the year.For example in agriculture the growers of a winter crop can be said as seasonally unemployed during summer season.
Frictional also not possible as frictional unemployment is the unemployment that a worker faces during the transition period i.e. period in which a worker shifts his job.
The 2nd case is clearly of frictional unemployment.Christina is unemployed for the transition period between her previous job and new job.Cant be strucrural unemployment as there is no demand shortage for a particular type of workers.Neither can it be seasonal unemployment because there no particular season in which unemployment rises.Cyclical unemployment also not possible since no mention of an economic downturn.
3rd case has to be of seasonal unemployment since there is a particular season in which the unemployment rises.Cant be structural again as no demand shortage for current skills in the economy.Neither cyclical as no mention of an economic recession.Frictional not possible as no mention of transition period between which the person is unemployed.
4TH scenario is an example of CYCLICAL unemployment as there is a clear cut mention of a cyclical downturn during which firms economic profits declined.Hence unemployment peaked during this time.
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