I am a bit confused regarding the actual definition of structural unemployment. Some places say that it is the permanent decline of a particular industry, leading to workers being unemployed as they are occupationally immobile.

Other sources say that it is a change in the structure of an economy (e.g. from secondary to tertiary), usually brought about by changes in technology. (Also, just another question, how exactly does improved technology help convert an economy from being mainly secondary to being mainly tertiary?)

So, could you please provide a rock-solid definition of 'structural unemployment'?

Answers would be very much appreciated.


Basically structural unemployment is caused by a mismatch in the skill of the workers available in the labor market and the skill demanded by the "buyers" in the labor market (firms). These workers don't have the skills that the market needs, so no one is willing to hire them.

This happens because the industry in which these workers used to be employed in is in the decline, and I think this is the more correct definition.

Generally, a decline in an industry is caused by a technological change, but not necessary.

Example of tech change -> decline:

The decline in demand for scribes (people who manually write texts in books) when the printing press was invented. This leads to the "decline of the scribe industry" and structural unemployment.

Example of industry decline without tech change:

Lumber industry... after 100 years all trees are gone. This would lead to a decline in demand for lumberjacks and a structural unemployment without technological change.

The second question might be better asked as a separate question per the guideline :)


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