Frictional Unemployment: Definition & Examples

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  • 0:04 What Is Frictional…
  • 0:48 Examples
  • 2:02 Lesson Summary
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Lesson Transcript
Instructor: Shawn Grimsley
Not all unemployment is involuntary. In this lesson, you'll learn about frictional unemployment and be provided some examples to illustrate it. You'll also have a chance to take a short quiz after the lesson to reinforce your knowledge.

What Is Frictional Unemployment?

Frictional unemployment is unemployment related to changing jobs. Also called transitional unemployment, frictional unemployment can occur even when an economy is at full employment, where anyone who wants a job at the current wage can have one. Some frictional unemployment is considered voluntary because it results from an independent decision made by an employed person rather than a decision of an employer.

The term 'frictional' is used to describe the fact that labor markets don't immediately match up job demand with job supply. You may remember from your high school science class that friction acts to slow things down. In the context of frictional unemployment, it takes some time to apply for jobs and for employers to make a selection.

Examples

Let's look at some common examples of frictional unemployment. Many of these examples should sound familiar.

Quitting

This is a voluntary form of frictional unemployment. Whether you quit for a better job or because you're just fed up, quitting is a voluntary action resulting in unemployment.

Termination

This is an involuntary form of frictional unemployment. Contrary to quitting, you don't usually attempt to get fired; your former employer imposes unemployment upon you.

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