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Frictional unemployment

AnalyticsTrade Team
AnalyticsTrade Team Last updated on 26 Apr 2023

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Frictional Unemployment

Frictional unemployment is a type of unemployment that occurs when workers are in the process of transitioning between jobs. It is a natural part of the labor market and is caused by the time it takes for workers to search for and find new jobs. Frictional unemployment is also known as search unemployment or transitional unemployment. It is the result of the natural flow of workers in and out of the labor market.

History of Frictional Unemployment

The concept of frictional unemployment was first introduced by the British economist William Stanley Jevons in 1871. Jevons argued that the labor market was constantly in flux, with workers entering and leaving the labor force as they searched for better job opportunities. He argued that this natural flow of workers in and out of the labor market was a source of frictional unemployment.

Since then, economists have studied the concept of frictional unemployment in greater detail. In the 1950s, the American economist Milton Friedman argued that frictional unemployment was a natural part of the labor market and could not be eliminated. He argued that it was the result of workers searching for better job opportunities and that it was an unavoidable part of the labor market.

Comparison Table

Type of Unemployment Definition
Frictional Unemployment Unemployment that occurs when workers are in the process of transitioning between jobs.
Structural Unemployment Unemployment that occurs when there is a mismatch between the skills of the unemployed and the jobs available.
Cyclical Unemployment Unemployment that occurs when there is a lack of aggregate demand in the economy.

Summary

Frictional unemployment is a type of unemployment that occurs when workers are in the process of transitioning between jobs. It is a natural part of the labor market and is caused by the time it takes for workers to search for and find new jobs. It is the result of the natural flow of workers in and out of the labor market. For more information about frictional unemployment, you can visit websites such as Investopedia, The Balance, and The Economist.

See Also

  • Structural Unemployment
  • Cyclical Unemployment
  • Natural Rate of Unemployment
  • Seasonal Unemployment
  • Classical Unemployment
  • Real Wage Unemployment
  • Voluntary Unemployment
  • Involuntary Unemployment
  • Underemployment
  • Disguised Unemployment

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