The unemployment rate among older Greek males is about twice the Eurozone average. These men were often families' sole bread winners. Now, strained by the financial woes, their wives have to take jobs outside the home. In Greece, with its macho, traditional culture, this could mean shame and depression for men. They have mortgage arrears, children to put through college and bills to pay. But for a few days' work at a factory, they have to sometimes travel across the country. a. What type of unemployment might older workers be more prone to experience than younger workers? b. Explain how the unemployment rate of older workers could be influenced by the business cycle. c. Why might older unemployed workers become marginally attached or discouraged workers during a recession?

Step by step solution

01

Understand the Context

The question is about the high unemployment rate among older Greek males, focusing on its implications and causes.

02

- Identify Type of Unemployment (Part a)

Older workers are more prone to structural unemployment compared to younger workers. This is because their skills may be outdated, or they may be less adaptable to new technologies and job market changes. Structural unemployment arises from the mismatch between the skills of the unemployed workers and the skills needed for available jobs.

03

- Analyze the Business Cycle Impact (Part b)

The unemployment rate of older workers can be influenced by the business cycle through cyclical unemployment. During economic downturns or recessions, older workers may be laid off first because companies might prefer to keep younger workers who might be less expensive or more versatile. In times of economic recovery, younger workers might be hired back more quickly than older workers.

04

- Marginally Attached or Discouraged Workers (Part c)

Older unemployed workers might become marginally attached or discouraged during a recession because they may face age discrimination, difficulty in retraining, or lack of affordable opportunities. This results in them being less active in seeking employment after prolonged periods of unsuccessful job searches, leading to discouragement.

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Key Concepts

These are the key concepts you need to understand to accurately answer the question.

structural unemployment

Older workers often face structural unemployment. This happens when their skills no longer match the needs of the job market. Older workers might find it difficult to adapt to new technologies. They may also struggle to acquire new skills. These skills mismatches make it tougher for them to find new jobs that they are qualified for. In Greece, traditional roles might mean older workers haven't needed to update their skills until now.
As the job market changes, it's important for older workers to seek training programs. This helps them stay relevant. Without adapting, they face longer periods of unemployment.

cyclical unemployment

Cyclical unemployment is directly tied to the business cycle. In times of economic downturns or recessions, companies often lay off workers. Older workers might be among the first to lose their jobs. This is because companies may prefer to keep younger, often cheaper and more adaptable employees.
During economic recoveries, companies may again prefer to hire younger workers first. This means older workers feel the brunt of both job losses during recessions and slower rehiring processes during recovery. Reducing the impact of cyclical unemployment involves policy solutions aimed at lessening economic downturns and supporting older workers in transition.

marginally attached workers

Marginally attached workers are those who are not actively seeking work but would like to have a job. Older workers might become marginally attached during tougher economic times. They often face multiple barriers, such as age discrimination. This can make job searches particularly discouraging.
When they repeatedly fail to find work, many stop looking actively, though they remain on the fringes of the job market. Supporting marginally attached workers requires better access to retraining programs and fighting against ageism within the hiring process.

discouraged workers

Discouraged workers have completely stopped looking for jobs because they feel there are no opportunities for them. An older worker might become discouraged after many failed attempts at finding work, facing rejections often. This is common during recessions when job opportunities are scarce.
Discouraged older workers may experience significant emotional and mental health impacts. Combating discouragement involves community support, mental health resources, and targeted job placement programs. Helping them feel optimistic about their prospects is key to re-engaging them in the workforce.