Final answer:
Changing demographics and worker mobility can generate additional frictional unemployment, which in turn increases the natural rate of unemployment.
Step-by-step explanation:
Changing demographics as well as increases in worker mobility may generate additional frictional unemployment and increases the natural rate of unemployment, all else held constant.
Frictional unemployment refers to temporary unemployment that occurs when individuals are transitioning between jobs or entering the workforce for the first time. It is caused by factors such as job searching, skill mismatch, or geographic mobility. Changes in demographics and worker mobility can increase frictional unemployment because more people are actively seeking employment or exploring different job options.
The natural rate of unemployment refers to the level of unemployment that exists in an economy when it is at full employment. It includes frictional and structural unemployment. Structural unemployment occurs when there are long-term mismatches between the skills and qualifications of workers and the requirements of available jobs. In the context of changing demographics and worker mobility, the increase in frictional unemployment can contribute to an increase in the natural rate of unemployment.