ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Frictional unemployment is the time period between jobs in which a worker searches for or transitions from one job to another. It is sometimes called search unemployment and can be voluntary, based on the circumstances of the unemployed individual.

Detailed explanation-2: -For example, a worker who quits their job in anticipation of lining up another one or someone who has just entered the workforce after graduation would be considered frictionally unemployed.

Detailed explanation-3: -Frictional unemployment occurs in a growing, stable economy. Workers moving from job to job and new workers entering the workforce contribute to frictional unemployment. Frictional unemployment is also caused by those deciding to prioritize taking care of their family, returning to school, or finding purpose in life.

Detailed explanation-4: -Frictional unemployment involves people transitioning between jobs; it has nothing to do with the economic cycle and is voluntary. Structural unemployment is a direct result of shifts in the economy, including changes in technology or declines in an industry.

Detailed explanation-5: -An example of cyclical unemployment is when construction workers were laid off during the Great Recession following the financial crisis of 2008. With the housing market struggling, construction of new homes fell dramatically, leading to a rise in cyclical unemployment for construction workers.