Structural Unemployment

Structural Unemployment

Unemployment that arises because of a mismatch between the character of the job and the workers in terms of

(i) Location (are jobs and unemployed workers located in the same area?)
(ii) Skills (what are the skills required for the jobs vacancies and the skills of those who are unemployed)

Mismatch arises because of changes in demand and technology
For example, technological change may have caused a worker's skills to become obsolete, and he or she may experience a period of unemployment before finding the opportunity to develop new skills and to adapt.