Foundations of Economics, 8th Edition

22.3 Unemployment and Full Employment

MyEconLab Concept Video

There is always someone without a job who is searching for one, so there is always some unemployment. The key reason is that the labor market is constantly churning. New jobs are created and old jobs die; and some people move into the labor force and some move out of it. This churning creates unemployment.

We distinguish among three types of unemployment:

• Frictional unemployment

• Structural unemployment

• Cyclical unemployment

Frictional Unemployment

Frictional unemployment is the unemployment that arises from people entering and leaving the labor force, from quitting jobs to find better ones, and from the ongoing creation and destruction of jobs—from normal labor turnover. Frictional ...