1 Answer | Add Yours
There is no one percentage that is considered to be full employment for every country and every time. Full employment is not a set figure. It may be that you were given more information in this question that would have allowed you to give a specific answer, but without such information, we cannot know what that answer is.
Economists generally say that there are three kinds of unemployment. There is frictional unemployment. This comes about when workers are either just entering the workforce or when they have quit their job (or been fired) and are looking for a new job. There is cyclical unemployment. This comes about when people are unemployed because the economy has gone bad. People can no longer afford to buy the things those workers had been making so the workers lose their jobs. Then there is structural unemployment. This is when workers’ skills are no longer needed in an economy. They lose their jobs because their skills are obsolete.
Full employment exists when there is no cyclical unemployment. The other two kinds of unemployment are, in some sense, good for the economy. Therefore, full employment exists when the unemployment rate is equal to frictional unemployment plus structural unemployment.
We’ve answered 320,037 questions. We can answer yours, too.Ask a question