Sources of Joblessness

Why are people unemployed? Figure 31-8 shows how people responded when asked the source of their unemployment, looking at the recession year of 1982 and the high employment year of 1999.

There is always some frictional unemployment that results from changes in people’s residence or from the life cycle-s-moving, entering the labor force for the-first time, and so forth. The major changes in the unemployment rate over the business cycle arise from the increase in job losers. This source swells enormously in a recession for two reasons: First. the number of people who lose their jobs increases, and then it takes longer to find a new job.