New entrants (such as graduating students) and re-entrants (such as former homemakers) can also suffer a spell of frictional unemployment. Workers and employers accept a certain level of imperfection, risk or compromise, but usually not right away. They will invest some time and effort to find a better match. That is, in fact, beneficial to the economy since it results in a better allocation of resources. However, if the search takes too long and mismatches are too frequent, the economy suffers since some work will not get done. Therefore, governments will seek ways to reduce unnecessary frictional unemployment by multiple means including providing education, advice, training, and assistance such as daycare centers. The frictions in the labour market are sometimes illustrated graphically with a Beveridge curve, a downward-sloping, convex curve that shows a correlation between the unemployment rate on one axis and the vacancy rate on the other. Changes in the supply of or demand for labour cause movements along the curve. An increase or decrease in labour market frictions will shift the curve outwards or inwards. Hidden unemployment
Official statistics often underestimate unemployment rates because of hidden, or covered, unemployment. That is the unemployment of potential workers that are not reflected in official unemployment statistics because of how the statistics are collected. In many countries, only those who have no work but are actively looking for work and/or qualifying for social security benefits are counted as unemployed.
as a result of the improving job market, but until they have actually found a position, they are counted as unemployed. Similarly, during a recession, the increase in the unemployment rate is moderated by people leaving the labour force or being otherwise discounted from the labour force, such as with the self-employed. For the fourth quarter of 2004, according to OECD (Employment Outlook 2005 ISBN 92-64-01045-9), normalized unemployment for men aged 25 to 54 was 4.6% in the US and 7.4% in France. At the same time and for the same population, the employment rate (number of workers divided by population) was 86.3% in the US and 86.7% in France. That example shows that the unemployment rate was 60% higher in France than in the US, but more people in that demographic were working in France than in the US, which is counterintuitive if it is expected that the unemployment rate reflects the health of the labour market.Those deficiencies make many labour market economists prefer to look at a range of economic statistics such as labour market participation rate, the percentage of people between 15 and 64 who are currently employed or searching for employment, the total number of full-time jobs in an economy, the number of people seeking work as a raw number and not a percentage, and the total number of person-hours worked in a month compared to the total number of person-hours people would like to work.