Frictional Unemployment

1.—Beside structural, cyclical and seasonal unemployment, a fourth variety must be isolated which can be called "frictional unemployment".

2.—Frictional unemployment arises from the difficulty which workers from a given "region" — within which several labour markets can be found — find in moving from one market to another. This implies that, within the region, there remain employment opportunities which are not met by unemployed persons who could take advantage of them if they just passed from one market to the other.

3.—Those unemployed, however, fail to do so for lack of information; for lack of continuousness and /or concordance in the length of the periods for which employment is offered or sought; because of the uncertainty which is inherent in mobility; due to increasingly tight regulations imposed by trade organizations; because of the complementarity of the production factors — or, in other words, because of a reduction in the possibilities for substituting some production factors for others; or, finally, because of that complex of psychological and social factors which attach workers to their trade or community.

4.—There are, however, a certain number of steps which could reduce frictional unemployment by increasing manpower mobility. Others would reduce it by tackling the mobility of other factors of production. But the cost element of resorting to one step or the other must be taken into account. For what is economically best is not always what is socially desirable. Social demands involve an economic expenditure: this, one must see clearly.