This enhances integration of students into the workforce with less structural and frictional unemployment
in the economy.
We assumed that the frictional unemployment
rate is roughly 2%, so any occupation with a 2% or lower unemployment rate would have no excess workforce whatsoever: all the currently unemployed workers in that occupation would be in the process of searching for and moving to a new employer.
This should reduce the probability of frictional unemployment
leading to more permanent expatriate departures from the UAE, and improve employment prospects.
If workers displaced by automation are unable to find new jobs quickly, frictional unemployment
will rise, putting downward pressure on wages.
This kind of unemployment is known as "frictional unemployment
." Later, "structural unemployment" was added to the definition of full employment.
Unfortunately, however, intuitive understandings can lead to technological unemployment being conflated with frictional unemployment
. A recent paper on machine intelligence by Loi (2015) is a case in point.
Such temporary spells of unemployment are referred to as frictional unemployment
Phelps  further developed the relationship by explaining how a reduction of frictional unemployment
is achieved, at least in the short-term, with inflation.
For instance there are the differences between frictional unemployment
versus cyclical unemployment versus structural (or long-term) unemployment (Myrick, 2012; Holzer, 1993; Schwartz, Cohen & Grimes, 1986; Gilpatrick, 1966).
arises from the unemployment of individuals who are changing jobs in response to temporary layoffs, workers quitting jobs to find new ones with better pay or job conditions, and persons entering or leaving the labor force.
However, despite a very tight labour market, the prospects for increasing wages seem to be limited as the latter have already seriously outpaced labour productivity (Figure 11) and the unemployment rate is already compressed to a level that is below natural (which includes structural and frictional unemployment
* Frictional unemployment
arises from the ever-present movement of people into and out of jobs.