What is structural unemployment.
Example of structural unemployment and
Causes of structural unemployment
Structural unemployment is a type of unemployment that occurs when there is a mismatch between the skills and qualifications of workers and the requirements of available jobs. This kind of unemployment is typically long-term and systemic, rather than cyclical or seasonal.
Example of structural unemployment: A common example of structural unemployment is the decline of the manufacturing industry in certain regions due to automation and outsourcing. As a result, workers who were previously employed in manufacturing jobs may struggle to find new employment opportunities that match their skills and experience.
Causes of structural unemployment:
1. Technological change: Advances in technology can lead to displacement of workers who lack the skills necessary to adapt to new job requirements.
2. Globalization: Increased competition from foreign markets can result in job losses in certain industries, leading to structural unemployment.
3. Changes in consumer demand: Shifts in consumer preferences can result in a decline in certain industries, causing workers in those sectors to face difficulty finding new employment.
4. Skills mismatch: Changes in the economy may create a demand for different types of skills than those possessed by the workforce, leading to structural unemployment.
5. Government policies: Certain government regulations or policies can impact the availability of jobs in certain sectors, leading to structural unemployment.