Government policies directed at reducing frictional unemployment include:
A) abolishing minimum-wage laws.
B) making unemployment insurance 100 percent experience rated.
C) increasing the earned income credit.
D) making government part of the union-firm wage bargaining process.

Question

Quizplus · Accepted Answer

Making unemployment insurance 100 percent experience rated can reduce frictional unemployment by providing workers with an incentive to look for work more quickly, as they will not receive benefits if they turn down a job offer. This can help to reduce the amount of time that workers spend unemployed and looking for work. Abolishing minimum-wage laws and making government part of the union-firm wage bargaining process may not address frictional unemployment specifically, and could have unintended consequences for the labor market. Increasing the earned income credit may help to alleviate poverty, but may not directly impact frictional unemployment.

Government Policies Directed at Reducing Frictional Unemployment Include