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Concept
Structural unemployment
Summary
Structural unemployment is a form of involuntary unemployment caused by a mismatch between the skills that workers in the economy can offer, and the skills demanded of workers by employers (also known as the skills gap). Structural unemployment is often brought about by technological changes that make the job skills of many workers obsolete.
Structural unemployment is one of three categories of unemployment distinguished by economists, the others being frictional unemployment and cyclical unemployment.
Because it requires either migration or re-training, structural unemployment can be long-term and slow to fix.
From an individual perspective, structural unemployment can be due to:
Inability to afford or decision not to pursue further education or job training.
Choice of a field of study which did not produce marketable job skills.
Inability to afford relocation.
Inability to relocate due to inability to sell a house (for example due to the collapse of a real estate bubble or of the local economy).
Decision not to relocate, in order to stay with a spouse, family, friends, etc.
From a larger perspective, there can be a number of reasons for structural unemployment across large numbers of workers:
Technological obsolescence makes a specific expertise useless. For example, demand for manual typesetters disappeared with digitization of printing plate production.
Productivity increases reduce the number of workers (with the same or similar skills) needed to satisfy demand.
New technology significantly increases productivity, but requires a smaller number of higher-skilled workers. For example, fewer agricultural workers are needed when the work is mechanized; those that remain must be trained to operate equipment. Another common example is the use of industrial robots to automate manufacturing. A study by Carl Benedikt Frey and Michael Osborne found in 2013 that almost half of U.S. jobs are at risk of automation.
Competition causes the same jobs to move to a different location, and workers do not or cannot follow.
Official source
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