Structural unNt

Question 1

Define structural unNt

Answer 1

• mismatch % skills that workers have and what firms want
• labor immobility

Question 2

How to reduce

Answer 2

• ss-side policies
• interventionist vs mkt-based

Question 3

Interventionist ss-side policies

Answer 3

• gov provide subsidies for training and upgrading workers’ skills
• education, training, re-training
• skills relevant; employable in new industries

Question 4

Interventionist ss-side policy (SG)

Answer 4

• MOM
• 10 yr Continuing Education and Training (CET) Masterplan
• acquire new skills, relevant
• prepare for jobs in emerging industries ie. aerospace

Question 5

Mkt-based ss policies

Answer 5

• labour mkt reforms
• increase labour mkt flexibility
• ie. reducing min wage – lower wages of unskilled workers; reduce unNt benefits

Question 6

Evaluation of ss-side policies (+ve)

Answer 6

1. No conflict % macro goals (ie. inflation)
   - promote economic growth and employment
   - maintain low inflation
   - rise in LRAS (vertical curve)– fall in gpl
2. Reduce income inequity
   - educated, skilled
   - > likely to be employed
   - active and productive part of society
   - income likely > equally distributed
   - provide income to the previously unemployed