Econ Day 13 Video 4

Overview

• Frictional unemployment is short-term and happens as people move between jobs in a changing economy.

Frictional Unemployment

• Caused by the time it takes to match workers with jobs.
• Common for new graduates and anyone searching for a new job.
• Always exists in a dynamic economy.

Job Statistics and Economic Change

• News reports show net job changes, but millions are hired and leave jobs each month.
• High job turnover is normal and healthy for the economy.

Economic Growth and Job Change

• People change jobs by choice or due to layoffs or business closures.
• Competition causes some firms to close and others to grow.
• Workers move to where they are more valuable, helping the economy grow.
• Frictional unemployment is a small cost for progress.

Other Types of Unemployment

• Structural and cyclical unemployment are more serious and will be covered next.

Key Terms & Definitions

• Frictional unemployment: Short-term unemployment from people moving between jobs or entering the workforce.
• Net employment change: The difference between jobs created (hires) and jobs lost (separations).
• Separations: People leaving jobs, including quitting, layoffs, or retiring.

Next Steps

• Review practice questions.
• Continue to the next topic: structural and cyclical unemployment.