Note 1-40

(40) The structural unemployment rate is the unemployment rate when the manpower shortage number (number of vacancies) corresponds to the number of persons out of work, while the cyclical unemployment rate is the unemployment rate generated by business fluctuations other than structural unemployment rates. The cyclical unemployment rate is sometimes called the demand-shortage unemployment rate. Here, we assume that when the manpower shortage number (number of vacancies) and the number of persons out of work are the same, such persons will be employed, barring structural factors such as mismatches and frictions involved in job switches. Also note that the vacancy rate was obtained from public employment services and is used here as a substitute for the vacancy rate of the labor market as a whole.