Government policies directed at reducing frictional unemployment include:
A) abolishing minimum-wage laws.
B) making employment 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 employment insurance 100 percent experience rated could reduce frictional unemployment by increasing the cost of unemployment for those who frequently switch jobs or quit without a new job lined up, encouraging them to stay in their current job longer or find a new job more quickly. Abolishing minimum-wage laws could potentially increase frictional unemployment by reducing the willingness of employers to hire and train inexperienced workers. Increasing the earned income credit could potentially reduce structural unemployment but would have little impact on frictional unemployment. Making government part of the union-firm wage bargaining process could potentially reduce structural unemployment but would have little impact on frictional unemployment.

Government Policies Directed at Reducing Frictional Unemployment Include