1. Teach students about the three types of unemployment
  2. Have the students understand that not everyone who is unemployed is unemployed for the same reason
  3. Make the lecture memorable to increase retention 


Teaching the three types of unemployment is an important thing to do in a macroeconomics course.  Whether the class be principals, intermediate or an MBA class, students will not be prepared for a role as a policy maker if they are under the false assumption that all unemployment is created equal.  Here, we will discuss three types of unemployment in regards to skills; what skills are present and what skills are needed. This lesson will warm the student up with a Big Bang Theory clip, demonstrate the concept with an experiment and then dive into discussion about policy prescriptions to help limit the different types of unemployment.

Start the lesson showing the video 'Sheldon Becomes Frictionally Unemployed'.   Ask the students if they think Sheldon will be able to get a job in the near future? Why or why not? Feel free to break students into groups to discuss the length at which they feel Sheldon will be unemployed.


The following activity will try and drive home the idea of skills and their role in unemployment. Each student will play both the part of the job seeker and the employer in this activity. The skill that students will have and need will be a characteristic about them. For the main part this article the skill each student has is the month in which they were born. (The extension section of the working paper, section V, provides other types of characteristics you can uses as skills for your students. This will be useful if you want to run multiple rounds of the activity or have a larger class.) The idea of matching will play out as students try and match their skill with another student who has the same skill. Some students will not be able to find a match because their birth month (read: skill) is not needed, other students will find someone who needs their skill but that person already been matched. As you can start to see, you can relate these different types of students to the three different types of unemployment.


Before you conduct the activity in class it is important that your students have some exposure to the different types of unemployment. This can be done by requiring the unemployment chapter be read before class, giving a pre-lecture quiz or going over the three types in lecture before the activity begins. Having students aware of the three types of unemployment will make it easier for them to connect it to the activity.

The total time for this activity will depend on a few factors including how active your students are in class as well as how many students you have. The total time also depends on how much discussion you want to leave at the end of the activity and if you want to explore any possible extensions. Many of the extensions cover other topics under the umbrella of unemployment which can lead to covering more material.

The cost in monetary terms for this activity is zero. There are no materials you as the instructor need to buy unless you want to hand out the directions on paper in which case you will need copies of the directions.

Class Day:

The best way to introduce the activity to the students is by showing a slide or handing out a paper with the directions as follows:

1.    For this in-class activity there will be absolutely no talking.

2.    Your goal is to find someone in the class that was born in the same month as you. Finding someone born in the same month as you means you are now considered employed.

3.    Once you find someone who was born in the same month as you, find two seats together and sit down.

4.    If you cannot find someone who has the same birth month as you, stand on the left side of the classroom.

5.    If you find people who have the same birth month as you but they are already paired up, stand on the right side of the classroom.

6.    While you are waiting for the activity to finish up, discuss how you feel the current employment situation is with the people around you. Do you know the current unemployment rate? What about the unemployment rate for other countries? For specific races? Or specific levels of education?

Make sure you give enough time for students to walk around and find a 'job.' The time this takes will depend on the number of students. Playing music in the background will kill the silence. Some suggestions of music would be the edited version of “Why Don't You Get a Job” by The Offspring, “Take this Job and Shove It!” by Johnny Paycheck, or the American folk song “I've Been Working on the Rail Road.”


Once all students are either matched up or standing on one side of the classroom or the other, an open discussion about the three types of unemployment should follow.

1.    Frictional Unemployment

Start with the group that found matches and are now sitting down. Congratulate them on finding a job and ask them how long it took them to find their match. Hopefully by now the students can relate this to frictional unemployment. Ask the class if they have any suggestions on to how to reduce the level of fictional unemployment in this activity. Then follow up by asking what ways frictional unemployment can be reduced in society.

2.    Structural Unemployment

For smaller classes you will likely have single students born in a month. For larger classes you may not run into structural unemployment. This is where using a different characteristic like the second letter of the student's first name or the area code the student's phone number has can work better or select a subset of students to participate in the activity. A list of characteristics you can use are listed in the extensions part, section V, of the working paper located on the right side of this page. Talk to those students about structural unemployment and the possibility that some skills just aren't needed in a job market. In this activity it is impossible to update their skills. They would need to change their birth month which is impossible. But you can discuss with them what they would need to do to find a job, if changing their birth month was a possibility. Ask the class if they have any suggestions on how to reduce structural unemployment in society. This may also be a good time to revisit the idea of opportunity cost and trade-offs when it comes to the government spending money on different types of programs.

3.    Cyclical Unemployment

In both small and large classes you should end up with an odd number of students for certain months. Talk to this group of students about how their skill was needed by an employer but there wasn't a job available for them at this time. Ask the students if they should update their skills. Some will say no and some will say yes. Inform them that they are both right and discuss the difficulties with cyclical unemployment.



Sheldon is now frictionally unemployed because his skills are still needed.

Larger Video: Sheldon Becomes Frictionally Unemployed