Frictional unemployment

Frictional unemployment is a type of unemployment that occurs when workers are between jobs. It is a natural and unavoidable part of the job market and is not necessarily a negative indicator of an economy's health.

Definition

Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called 'search unemployment' and can be voluntary based on the circumstances of the unemployed individual.

Causes

Frictional unemployment is caused by voluntary changes in the workforce and by temporary transitions. Workers may quit their job to seek better opportunities, or they may be in the process of moving to a new location. Additionally, new entrants to the workforce, such as recent graduates, contribute to frictional unemployment as they search for their first job.

Effects

While frictional unemployment can be inconvenient for the individuals experiencing it, it is generally considered beneficial to the economy. It allows for mobility and flexibility within the job market, and can lead to better matches between employers and employees, which can increase overall economic efficiency.

Frictional Unemployment and the Economy

Frictional unemployment is a natural part of the economic cycle. It is always present in the economy, even when the economy is growing. Economists consider it to be an indicator of a healthy job market, as it suggests that workers are able to leave their jobs in search of better opportunities.

See Also

• Structural unemployment
• Cyclical unemployment
• Unemployment rate
• Job search