Frictional unemployment

Definition

Frictional unemployment occurs when individuals are temporarily unemployed while transitioning between jobs, often due to personal choice or circumstances rather than economic downturns. It is a natural part of a healthy economy, reflecting the normal job search process.

Related terms

Labor Force:

The total number of people employed and actively looking for employment in an economy.

Structural Unemployment:

This occurs when there is a mismatch between the skills workers possess and the skills needed for available jobs due to technological advancements or shifts in the economy.

Cyclical Unemployment:

A type of unemployment that rises during economic downturns and falls when the economy improves, directly tied to phases of business cycles