Sterling Terrell

recovering economist

Economics 101: Frictional Unemployment

Economics 101: Frictional Unemployment

[This is part of the series: The Complete Guide To Economics 101.]

What is frictional unemployment?

Frictional Unemployment is unemployment of a transitory nature, where people are moving from one phase of life to another.

Examples of this include:

  • Summer-camp counselors looking for jobs in the fall
  • Students graduating from school and looking for work
  • Someone getting out of rehab and trying to get back into the workforce
  • And a person quitting their job in hopes of finding a better one (I do not advise this.)

Economics 101: Structural Unemployment

Economics 101: Structural Unemployment

 [This is part of the series: The Complete Guide To Economics 101.]

What is structural unemployment?

Structural Unemployment is unemployment caused by advances in technology.

This is what Joseph Schumpeter meant when he said “creative destruction.”

Simply: Innovation puts some out of business.

You want examples?

  • Since the internet, experienced printers have lost their jobs
  • Cotton pickers found other jobs when cotton harvesting became mechanized
  • Investment professionals have lost many jobs to computers
  • And buggy makers became obsolete when the car became available to the masses
Sterling Terrell