Stalla-Econ Qn

For people using Stalla Practice Exams Workbook 2008Ed L1… Exam 1 Q39. Why is the ans © No effect on cyclical unemployment; Increase in structural unemployment and not (d) No effect on cyclical unemployment; Decrease in structural unemployment?

Coud you post the question?

no one is using stalla???

My book is at home… I am at work :slight_smile:

The question is about the effects of a wave of low skilled immigrant labor over cyclical (increase, no affect) and structural (increase, decrease) unemployment. Cyclical unemployment is recessionary unemployment. People are getting laid off because of momentary poor economic conditions (like the guys in the finance industry that are recently being laid off). I don’t see how a wave of low skiled labor could cause an increase in recessionary unemployment. Structural unemployment is when individuals don’t find jobs for their qualifications. It is more likely that the new wave of low skills labor is going to increase structural unemployment rather than decrease it, how many low skilled jobs could be out there to absorb all new low skilled labor?

I would say yes, more low skills labor increases structural unemployment as you said, and also agree that cyclical is not affected, as that has to do with the business cycle, not the new labor situation.

yeap, that’s the correct answer.