Frictional Unemployment

Posted in Human Resource Terms, Total Reads: 214
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Definition: Frictional Unemployment

Frictional Unemployment is a period of an individual between the Unemployment and Employment ‘or’ Earlier Employment and Employment. This is also called natural unemployment. It is the transition time of an individual shifting from one job to another. One of the reasons is that he did not have a particular skill for the employment ‘or’ there is a gap between his/her expectations and reality.


The mismatch is due to the following reasons.

I. Time period

I. Skills

II. Payments

III. Attitude

IV. Taste

 

There is another type of unemployment called wait unemployment. It means that the workers are paid more than the market equilibrium. It indicates the excess amount which can be paid to the others workers in a sector which will help country to reduce employment in country.

 

Some type of unemployment can be avoided by reducing the gap of information between need of jobs and need of employment. The frictional employment stays for a short period of time. Hence, it does not have a large impact on an economy of country. The economist also does not account for the frictional employment for calculations of GDP, GNP etc.

 

Example

Recently, numbers of engineering colleges are increasing rapidly. It leads to large supply of engineers in job market. But, on the other side of coin, the commerce stream faces severe shortage of students as well as good faculty in market. It indicates frictional unemployment for Engineering graduates and commerce faculty at undergraduate level.

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