Q.What is frictional unemployment? Give one example.

Frictional unemployment is short-term unemployment that occurs while a worker is between jobs, searching for a suitable new position.

Frictional unemployment is a short-term, transitional form of unemployment that arises when a worker is between jobs — for instance, someone who has resigned from one position and is searching for a more suitable one, or a person re-entering the labour force after a break. It occurs because information about job vacancies is imperfect and matching a specific worker's skills and preferences to a specific vacancy takes time; neither workers nor employers can find each other instantaneously.

An example: a fresh college graduate in Gujarat who has completed their degree and is actively applying for jobs, attending interviews, and comparing offers before accepting one, is frictionally unemployed during this search period — they are willing and able to work and are actively seeking it, but have not yet completed the matching process with an employer.

Frictional unemployment is generally regarded as a normal, even healthy, feature of a well-functioning labour market, since some minimum amount of search and matching time is unavoidable even when the overall economy is doing well.

Confusing frictional unemployment (short search time, healthy economy) with structural unemployment (skills mismatch, needs retraining) — the two are often mixed up because both can affect an individual "between jobs."