Types of Frictional Unemployment

• New Entrants: Graduates or individuals entering the workforce for the first time.

• Job Leavers: Workers voluntarily quitting to find better opportunities (e.g., higher pay, better fit).

• Re-entrants: People returning to the labor force after a break (e.g., for family care). 

Causes & Characteristics

• Voluntary: Often a choice to find a better job or career path.

• Short-Term: A transitional phase, not a sign of economic collapse.

• Indicator of a Healthy Economy: Workers can afford to leave jobs when there are plentiful options. 

Examples

• A software engineer quitting to find a role with more flexible hours.

• A recent college graduate searching for their first professional position.

• A parent taking time off to raise children and then looking for new employment. 

How it Differs from Other Unemployment

• Vs. Structural Unemployment: Structural unemployment is due to long-term shifts in the economy (e.g., technology, industry decline), making skills obsolete, whereas frictional is about the search process.

• Vs. Cyclical Unemployment: Cyclical unemployment rises during recessions due to decreased demand for labor, while frictional happens even in good economies.