A Business Encyclopedia

Structural Unemployment

Definition: The Structural Unemployment is the situation when the jobs are available, and also the workers are willing to work, but they don’t have the required job skills to qualify for the vacant positions.

In other words, a mismatch between the skills that unemployed workers possess and the skills required to perform a job is called as the structural unemployment. The structural unemployment occurs due to the change in the demand for specific types of labor because of the fundamental shifts in the economy.

Such unemployment could arise due to the lack of prerequisite skills of the workers, or the worker residing in a place far from the region where the jobs are available and do not want to shift there. Also, the workers might not be willing to join any job because of the low wage scale.

The structural unemployment is long lasting and is often considered as permanent because it is quite difficult for every worker to learn new skills and move to the regions where the jobs are available. Often, the structural unemployment gets created due to the advancement in technology that changes the demand patterns for the labor workforce. Such as, with the introduction of more sophisticated machinery the demand pattern of the labors has changed drastically.

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