A Business Encyclopedia

Frictional Unemployment

Definition: The Frictional Unemployment also called as Search Unemployment, refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.

In other words, an employee requires time for searching a new job or shifting from the existing to a new job, this inevitable time delay causes the frictional unemployment. It is very much prevalent in the economy as people transit from one job to another in search of a better opportunity. And, also, students seek jobs after they complete their studies.

The frictional unemployment is temporary and lasts for a short period of time, i.e. from the time employee leaves his job and join a new job. It is often considered as a voluntary unemployment because it is not caused due to the shortage of job, but in fact, the workers themselves quit their jobs in search of better opportunities.

Also, the frictional unemployment gets created due to the inadequate and inconsistent information. Such as first-time job seeker might not have sufficient resources to find out the companies offering jobs suitable for him. Due to this, the aspirant does not take up any work and waits for some time to avail better job opportunities. This time, delay leads to the frictional unemployment.

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