Question

Please describe someone you know (don't provide actual names or any other confidential information) who is or was unemployed. What type of unemployment was it? What was the duration?

Answer 1

Here I'll be talking about a lady who lives in my neighborhood.She was unemployed for around 6 months before getting a job.She has been blessed with a baby girl some time ago.She was basically working in a private finance company and she wanted to take a long maternity leave when she became pregnant but her maternity leave was not approved by her company.So,she had to quit the job as her doctor had suggested her bed rest because of some medical complications.After the baby was born,she wanted to start working again but was not able to find any till 6 months.This type of unemployment is called Frictional Unemployment.

A person is said to be unemployed when s/he is not working even part-time but is able to work and is actively looking for a job.

There are different types of unemployment such as Structural Unemployment,Frictional Unemployment,Cyclical Unemployment etc.Here I'll be discussing about Frictional Unemployment in detail.

Frictional Unemployment

Frictional Unemployment results from the time spent by workers to find a job or to switch job because they might be looking for better opportunity,higher salary,better work environment,better bonus,early promotion,different profile to work in etc.Thus,this type of unemployment is also called search unemployment or wait unemployment.

The time,energy and monetary cost of searching for a new job is called friction and that is where it gets its name from.Frictional unemployment exists for short-term and is a natural part of the job search process.Economists say that frictional unemployment is good for an economy because it allows workers to move to jobs where they can be more productive and earn better.

Frictional unemployment includes new job seekers(fresh graduates),re-entrants(former homemakers)etc.Sometimes it occurs because there is inconsistent or incomplete information between the employer and the job seekers which takes it too long for companies to find a suitable match for their job and also sometimes companies pay high wages to their existing employees which makes it difficult for them to hire more people because that would increase their wage expenses.Frictional unemployment can be reduced by quickly matching job seekers with suitable job openings and this can be accomplished by dissemination of information through social media platforms and job posting websites which will help in bringing down the unemployment rate.