Dr. Frankenstein graduated from PSU in 2009 and entered the labor market seeking

Question

Dr. Frankenstein graduated from PSU in 2009 and entered the labor market seeking for a position. At the beginning of 2010 he found his first job in North Pole. But due to lack of skills required, he lost his job at the beginning of 2011. After further study he got another work in South Pole at the beginning of 2012. However, he was unlucky again. At the beginning of 2013 he lost his work again because there was a great recession all over the world. This time Dr. Frankenstein lost his confidence entirely. He stopped seeking for new positions and stayed at home watching TV.

A) What are the impacts on unemployment rate and labor force participation rate in 2009, 2010, 2011, 2012 and 2013 due to Dr. Frankenstein? Hint: Only consider Dr. Frankenstein's employment condition, assuming all others' employment conditions stay the same.

B) What kinds of unemployment occurred in the story? Please list all of them together with your evidence.

Explanation / Answer

Dr.frankestein initially lost his job due to lack of skill means even after the availability of jobs he could sustain due to lack of appropirate skills. But later he lost due to recession which meand he was involuntarily unemployed where he was willing and able to work but could not find the appropriate job. Due to recession ,output falls in the economy and due to fall in demand unemployment increases. However when the economy goes through various phases of boom recession it is called cyclical employment,Also since frankestein could not meet the needs of employer he was structurally unemployed.Further after recession if it takes time for him to settle for a new job it is called frictional unemployment.Thus economy stability plays an important role in deciding type of unemployment falling thereafter.

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