You are here


8 May, 2015 - 11:14

The natural rate of unemployment corresponds to the combination of frictional and structural unemployment which cannot be avoided even in a very high level of economic activity. This natural rate of unemployment has historically been around 4%, but it has risen slightly in recent years because of changes in labor force which now includes more women and young people (who take often more time to find jobs).

Changes in tastes or production methods are major causes for structural changes in our economy. These changes go on all the time. Some structural unemployment is just unavoidable. Some frictional unemployment is desirable. If, to these two forms of unemployment is added the unemployment caused by first time job seekers, it is clear that there will always a number of individuals seeking employment.