Structural unemployment is primarily caused by what factor?

Structural unemployment occurs when there is a significant mismatch between the skills that workers possess and the skills that employers require. This situation can arise due to various factors such as technological advancements that render specific jobs obsolete or shifts in industry demands that change the nature of available jobs. For instance, when a new technology is introduced that requires skills workers do not have, those workers may find themselves unemployed until they can acquire those skills through training or education.

This type of unemployment is not typically related to the overall economic cycle or seasonal variations, being instead rooted in long-term changes in the economy and labor market. As a result, individuals experiencing structural unemployment might struggle to find new employment opportunities relevant to their current skill set, necessitating a period of retraining or adjustment.