Frictional Unemployment


Unemployment is a major issue that affects economies worldwide. While there are many types of unemployment, frictional unemployment is a unique form caused by increased job searching. If the companies are able to figure out the quitting reasons, they can scale up the employee retention rate.

 Frictional Unemployment

Although frictional unemployment can be seen as a positive turn of events for the economy, it has the negative side as well like rise in unemployment rate, reduced money circulation in the economy, etc.

Define Frictional Unemployment

The gap between fresh employees joining for the first time and the existing employees moving to new jobs is referred to as frictional unemployment. The reasons to shift from one job to another can be numerous like mismatch of skills, lack of satisfaction, searching for better roles with higher pay, etc. This is temporary shift and occurs when an individual changes jobs frequently.

Understanding Frictional Unemployment

Frictional unemployment is a natural and expected part of any economy. This occurs from when an individual quits their job to when the employer identifies and hires them for the desired role. The job search is only sometimes efficient as the individual has to find a job that will satisfy them with the required skillset and qualifications.

Causes of Frictional Unemployment

There can be many factors that may cause frictional unemployment. A change in the job market or economic shifts may result in unemployment. Sometimes, even personal circumstances, persuasion of higher education, technological advancements, job displacement, are some of the factors resulting in frictional unemployment.

Impact of Frictional Unemployment

While frictional unemployment can be frustrating for individuals seeking employment, it is generally considered a positive economic force. It helps individuals search for more appropriate jobs according to their skills and qualifications. We can expect an efficient job market and a more productive economy in the near future.

Effect of the Unemployment Rate

When employees resign, a time gap is created until they get another job, known as frictional unemployment. It is a natural part of the job search process and can be caused by changes in the economy, technology, and personal circumstances. Frictional unemployment is related to the unemployment rate. The higher the unemployment rate, the number of job seekers also increase.

Slow Recruitments Leads to Frictional Unemployment

The impact of the unemployment rate on frictional unemployment can be seen in the data. When unemployment rates are high, the number of job seekers also increases. This will increase the time taken to look for/get another job. This can lead to higher frictional unemployment, as workers may take longer to find new jobs, and most will not want to settle for lower-paying positions.

Ways to Overcome Frictional Unemployment

There are multiple ways to overcome frictional unemployment. Some of them includes upgrading your skills, networking, improving job flexibility, etc.. Another approach to reduce frictional unemployment is using technology as a leverage for job search.

Finally, job training and education can help workers acquire the skills to find new jobs in high-demand fields.

Examples of Frictional Unemployment

Here are some examples of frictional unemployment in passive voice −

  • Seasonal Workers − Seasonal workers, such as those in the agricultural or tourism industry, experience frictional unemployment as they move between seasonal jobs. For example, migrant farm workers may experience unemployment during winter when less work is available.

  • Recent Graduates − Recent graduates may experience frictional unemployment as they search for their first job after completing their education. This occurs because e employers ask for new skills and experience, resulting in delaying the search for the right job.

  • Career Changers − Workers changing careers may also experience frictional unemployment as they transition from one industry to another. This is because they may need to acquire new skills or qualifications, which can take time and delay their ability to find a new job.

  • Layoffs or Downsizing − Frictional unemployment is high when there is a mass lay-off of employees as the new employees will have to search for jobs. Since the number of jobless people is high, the gap to getting a new job will increase. This will cause delays and increase the unemployment rate.

  • Military Veterans − Military veterans may also experience frictional unemployment as they transition from military service to civilian life. They may need to update their skills or search for jobs in a new industry. They may also face challenges such as a lack of work experience or difficulty translating military experience into civilian job qualifications.


Frictional unemployment is a natural part of the job search process and can be caused by various factors. The effect of the unemployment rate on frictional unemployment is significant, and higher unemployment rates can increase the time workers find new employment.

To overcome frictional unemployment, workers can improve their job search skills, use technology to make job searches more efficient, and seek job training and education to acquire new skills. By taking these steps, workers can reduce the time it takes to find new employment and minimize the impact of frictional unemployment on their lives.


Q1. What is frictional unemployment?

Ans. Frictional unemployment occurs when workers are between jobs, looking for new employment opportunities, and there is a delay in finding a new job.

Q2. What are the causes of frictional unemployment?

Ans. Economic changes, technological advancements, personal circumstances, and seasonal fluctuations in certain industries can cause frictional unemployment.

Q3. What is the difference between frictional unemployment and other types of unemployment?

Ans. Frictional unemployment differs from other types, such as structural or cyclical unemployment. Structural unemployment is caused by economic changes that make certain skills or industries obsolete, while fluctuations in the business cycle cause cyclical unemployment.

Updated on: 26-Apr-2023


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