Final answer:
Technological change leads to both unemployment and job creation. Productivity improvements can lead to technological unemployment, such as in the auto industry and traditional retail affected by the internet, while creating jobs in tech sectors. The net impact on employment and GDP is assessed through indicators like the natural rate of unemployment and potential real GDP.
Step-by-step explanation:
Understanding Unemployment Related to Technological Change
Technological change has both caused unemployment and created new jobs within the economy. Examples of technological unemployment include the reduction of jobs in auto manufacturing due to productivity improvements, and the displacement of travel agents and bookstore clerks due to the rise of the internet. Conversely, technology has created jobs in fields such as IT services, data analysis, and digital marketing.
Frictional and Structural Unemployment Explained
Frictional unemployment occurs as workers move between jobs, companies, or locations. Examples include recent graduates seeking their first job or individuals who have quit their job and are looking for a better opportunity.
Structural unemployment happens when there's a mismatch between the skills workers possess and the skills needed for the available jobs, often due to technological advancements or shifts in the economy. Examples include factory workers displaced by automation who lack the skills for new tech-based roles.
Impact on Employment and GDP
To measure the net impact of technological change on employment and GDP, we would look at indicators such as the natural rate of unemployment, which comprises both frictional and structural unemployment, and potential real GDP. These metrics reflect the job market's health and the economy's total output potential. Productivity gains, influenced by public policy and technological progress, can boost potential real GDP while affecting employment rates as industries evolve.