Final answer:
Contingent workers such as temporary workers, contract employees, or leased employees have aided in reducing the natural rate of unemployment by introducing flexibility and trial opportunities for both workers and employers in the labor market.
Step-by-step explanation:
Temporary workers, contract employees, or leased employees are all examples of contingent workers. The growth of the temporary worker industry is significant because it has helped to lessen the natural rate of unemployment. From just 0.5% in the early 1980s to over 2% by the early 2000s, the rise in temp agency engagement showcases its impact. These agencies act as intermediaries that not only furnish jobs for individuals seeking permanent positions but also act as a sort of clearinghouse by connecting workers with potential employers for trial opportunities.
Such temp roles often serve as crucial avenues for workers to find permanent employment that they may otherwise have been unaware of, thereby reducing frictional unemployment. Moreover, from the employer's perspective, employing a worker on a trial or probationary period allows businesses to assess the suitability of an employee before making a long-term commitment, sometimes with a lower initial wage as a precautionary measure against hiring a poor-performing worker.