unemployment: it refers to the effects of the existence of some sectors where employed workers are paid more than the market-clearing equilibrium wage. Not only does this restrict the amount of employment in the high-wage sector, but it attracts workers from other sectors who wait to try to get jobs there. The main problem with this theory is that such workers will likely "wait" while having jobs, so that they are not counted as unemployed. In Hollywood, for example, those who are waiting for acting jobs also wait on tables in restaurants for pay (while acting in "Equity Waiver" plays at night for no pay). However, these workers might be seen as underemployed (definition 1). Solutions Policies to reduce frictional unemployment include: educational advice; information on available jobs and workers; combating prejudice (against certain workers, jobs or locations); incentives and regulations (e.g. when the frictionally unemployed receive benefits); relocation of industries and services; facilities to increase availability and flexibility (e.g. daycare centers); aid or grants to overcome a specific obstacle (e.g. if a disabled worker is employed); reduction of the gap between gross and net wages (e.g. by taxing consumption instead). When handing out work permits (to foreigners), i.e. must stay with that company at the same work place address as state on the work permit. References External links Market with search frictions , Scientific Background on the Sveriges Riksbank Prize in Economic Sciences in Memory of Alfred Nobel 2010 compiled by the Economic Sciences Prize Committee of the Royal Swedish Academy of Sciences. Unemployment