Frictional unemployment Unemployment

the beveridge curve of 2004 job vacancy , unemployment rate united states bureau of labour statistics.

frictional unemployment time period between jobs when worker searching for, or transitioning 1 job another. called search unemployment , can voluntary based on circumstances of unemployed individual.

frictional unemployment exists because both jobs , workers heterogeneous, , mismatch can result between characteristics of supply , demand. such mismatch can related skills, payment, work-time, location, seasonal industries, attitude, taste, , multitude of other factors. new entrants (such graduating students) , re-entrants (such former homemakers) can suffer spell of frictional unemployment.

workers employers accept level of imperfection, risk or compromise, not right away; invest time , effort find better match. in fact beneficial economy since results in better allocation of resources. however, if search takes long , mismatches frequent, economy suffers, since work not done. therefore, governments seek ways reduce unnecessary frictional unemployment through multiple means including providing education, advice, training, , assistance such daycare centers.

the frictions in labour market illustrated graphically beveridge curve, downward-sloping, convex curve shows correlation between unemployment rate on 1 axis , vacancy rate on other. changes in supply of or demand labour cause movements along curve. increase (decrease) in labour market frictions shift curve outwards (inwards).