Structural unemployment occurs when there is a mismatch between the skills of the workforce and the needs of employers. This can happen due to technological advancements, changes in consumer demand, or shifts in the economy that render certain jobs obsolete. For example, as industries evolve, workers may find their skills outdated and may need retraining to meet new job requirements.
This type of unemployment is different from cyclical unemployment, which is related to economic downturns. Structural unemployment can persist even during periods of economic growth if workers are unable to transition into new roles. Addressing this issue often requires investment in education and training programs to help workers adapt to changing job markets.