Frictional Unemployment Explained

Frictional unemployment is the technical term used to refer to individuals who describe themselves as "in between jobs." Frictional unemployment develops among individuals who are in the middle of a transitional period between jobs or who are searching for a new job. Frictional unemployment may also be known as search unemployment, can be completely voluntary, and is completely compatible with full employment.

The most common individuals who experience frictional unemployment are graduating students or individuals, such as former homemakers, who are re-entering the job market.

Frictional unemployment exists because individuals may be mismatched with jobs for a variety of factors, which can vary include skills, payment levels, work hours, the location of either the job or the worker, the attitude of the worker or the office, dissatisfaction, or many other factors.

Although there is an inherent level of dissatisfaction on the part of both employers and workers, which is beneficial since it means both parties will continue to search for more efficient solutions, high turnover can be detrimental to a businesses, and severe dissatisfaction can cause a decrease in employee productivity if there is insufficient job satisfaction on the part of the employee.

In order to minimize the impact of frictional unemployment upon the society as a whole, governmental policies may be instituted to minimize the amount of time that the frictionally unemployed remain "in between jobs."