Frictional Unemployment

Suppose a person loses a job, perhaps because the work is finished. This could happen to a construction craftsman or craftswoman, for example, when the construction job is finished; or it could happen to an actor or actress when the show closes. It will ordinarily take some time before that person finds another job. But -- while construction craftsmen and entertainers can ordinarily expect to face this problem from time to time, it is something that can happen to anyone employed. People who are simply between jobs, in this sense, are said to be frictionally unemployed. This is a particularly important category, since this category of unemployment can never be eliminated or reduced to zero. Even in the best-functioning market economy, there will be some people who are between jobs. The practical minimum proportion of the work force who are between jobs in given circumstances will be called the frictional unemployment.

Cyclical Unemployment