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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.
Frictional unemployment occurs when a worker is voluntarily between jobs. This is normal and healthy for the economy, as it increases the matches between job openings and seekers. Structural unemployment is caused by structural changes in the economy. This includes technological changes and the movement and relocation of certain industries.
The implication is that sustained high demand may lower structural unemployment. This theory of persistence in structural unemployment has been referred to as an example of path dependence or "hysteresis". Much technological unemployment, [21] caused by the replacement of workers by machines might be counted as structural unemployment ...
Technological unemployment is the loss of jobs caused by technological change. [1] [2] [3] It is a key type of structural unemployment. Technological change typically includes the introduction of labour-saving "mechanical-muscle" machines or more efficient "mechanical-mind" processes , and humans' role in these processes are minimized. [4]
The Beveridge curve, or UV curve, was developed in 1958 by Christopher Dow and Leslie Arthur Dicks-Mireaux. [2] [3] They were interested in measuring excess demand in the goods market for the guidance of Keynesian fiscal policies and took British data on vacancies and unemployment in the labour market as a proxy, since excess demand is unobservable.
In an economy with involuntary unemployment, there is a surplus of labor at the current real wage. [1] This occurs when there is some force that prevents the real wage rate from decreasing to the real wage rate that would equilibrate supply and demand (such as a minimum wage above the market-clearing wage). Structural unemployment is also ...
The official unemployment figures do not include jobless people who have dropped out of the labour force altogether because they can not find work as they include only those actually looking for work. The global unemployment rate is strongly influenced by population growth; the more population, the more unemployed and employed in absolute numbers.
This causes the short run Phillips curve to shift to the right and upward, worsening the trade-off between inflation and unemployment. At a given unemployment rate, inflation accelerates. But if the unemployment rate rises to equal the NAIRU, we see higher inflation than before the expansionary policies, as at point C in the nearby diagram. The ...