Structural Unemployment Cause
A Structural Unemployment Cause is an unemployment cause based on a mismatch between unemployed worker skills and the vacant job skill requirements.
- Context:
- It can be quantified by a Structural Unemployment Rate.
- It can be a Natural Unemployment Cause (along with frictional unemployment).
- It can influence Labor Participation Rate (Aaronson et al., 2014).
- Example(s):
- a Skill-Mismatch Unemployment Cause.
- a Long-Distance Work Relocation Cause.
- an Economic Recession, due to Organizations requiring fewer Workers.
- …
- Counter-Example(s):
- See: Long-Term Unemployment.
References
2014
- (Wikipedia, 2014) ⇒ http://en.wikipedia.org/wiki/structural_unemployment Retrieved:2014-3-14.
- Structural unemployment is a form of unemployment where, at a given wage, the quantity of labor supplied exceeds the quantity of labor demanded, because there is a fundamental mismatch between the number of people who want to work and the number of jobs that are available. The unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available. Structural unemployment is one of the five major categories of unemployment distinguished by economists. Structural unemployment is generally considered to be one of the "permanent" types of unemployment, where improvement if possible, will only occur in the long run.
- http://www.investopedia.com/terms/s/structuralunemployment.asp
- A longer-lasting form of unemployment caused by fundamental shifts in an economy. Structural unemployment occurs for a number of reasons – workers may lack the requisite job skills, or they may live far from regions where jobs are available but are unable to move there. Or they may simply be unwilling to work because existing wage levels are too low. So while jobs are available, there is a serious mismatch between what companies need and what workers can offer. Structural unemployment is exacerbated by extraneous factors such as technology, competition and government policy.
2013
- (Shierholz et al., 2013) ⇒ Heidi Shierholz, Natalie Sabadish, and Nicholas Finio. (2013-04-10). “Class of 2013Young graduates still face dim job prospects.” In: Economic Policy Institute.
- The scarcity of job opportunities for the Class of 2013 is a symptom of weak demand for workers more broadly. What will bring down young workers’ unemployment rates most quickly and effectively are policies that will generate strong job growth overall, such as fiscal relief to states, substantial additional investment in infrastructure, expanded safety net measures, and direct job creation programs in communities particularly hard-hit by unemployment.
2012
- http://en.wikipedia.org/wiki/Cyclical_unemployment#Structural_unemployment
- QUOTE: Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the unemployed workers and the skills needed for the available jobs. Structural unemployment is hard to separate empirically from frictional unemployment, except to say that it lasts longer. As with frictional unemployment, simple demand-side stimulus will not work to easily abolish this type of unemployment.
Structural unemployment may also be encouraged to rise by persistent cyclical unemployment: if an economy suffers from long-lasting low aggregate demand, it means that many of the unemployed become disheartened, while their skills (including job-searching skills) become "rusty" and obsolete. Problems with debt may lead to homelessness and a fall into the vicious circle of poverty. This means that they may not fit the job vacancies that are created when the economy recovers. Some economists see this scenario as occurring under British Prime Minister Margaret Thatcher during the 1970s and 1980s. 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".
- QUOTE: Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the unemployed workers and the skills needed for the available jobs. Structural unemployment is hard to separate empirically from frictional unemployment, except to say that it lasts longer. As with frictional unemployment, simple demand-side stimulus will not work to easily abolish this type of unemployment.
- http://en.wikipedia.org/wiki/Structural_unemployment
- QUOTE: Structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Even though the number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available.
Structural unemployment is a result of the dynamics of the labor market, such as agricultural workers being displaced by mechanized agriculture, unskilled laborers displaced by both mechanization and automation, or industries with declining employment. Many of these displaced workers are "left behind" due to costs of training and moving (e.g., the cost of selling one's house in a depressed local economy), inefficiencies in the labor markets, such as discrimination or monopoly power, or because they are unsuited for work in growing sectors such as health care or high technology.
Structural unemployment is hard to separate empirically from frictional unemployment, except to say that it lasts longer. As with frictional unemployment, simple demand-side stimulus will not work to easily abolish this type of unemployment.
Structural unemployment may also be encouraged to rise by persistent cyclical unemployment: if an economy suffers from long-lasting low aggregate demand, it means that many of the unemployed become disheartened[citation needed], while their skills (including job-searching skills) become "rusty" and obsolete. Problems with debt may lead to homelessness and a fall into the vicious circle of poverty. This means that they may not fit the job vacancies that are created when the economy recovers. Some economists see this scenario as occurring under British Prime Minister Margaret Thatcher during the 1970s and 1980s. 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."
- QUOTE: Structural unemployment is a form of unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. Even though the number of vacancies may be equal to, or greater than, the number of the unemployed, the unemployed workers may lack the skills needed for the jobs, or they may not live in the part of the country or world where the jobs are available.
2009
- (Schettkat & Sun, 2009) ⇒ Ronald Schettkat, and Rongrong Sun. (2009). “Monetary policy and European Unemployment.” In: Oxford Rev Econ Policy (2009) 25 (1): 94-108. doi: 10.1093/oxrep/grp003
- QUOTE: ... Whatever the wording - “natural employment”, “full employment”, “natural unemployment”, “equilibrium unemployment”, “neutral unemployment”, “equilibrium output” “potential output”, “natural growth” - it seems to be generally accepted among economists that resources may be overused and that this may create inflationary pressure.9 However, since the “potential” (to use a shortcut for the different wordings) cannot be observed directly but needs to be estimated, the measurement (in a theoretical sense as well as with respect to econometric methods) is under debate10. When do economies depart from the natural rate of unemployment (from full employment)?
1990
- (Hammer, 1990) ⇒ Michael M. Hammer. (1990). “Reengineering Work: Don't Automate, Obliterate.” In: Harvard business review, 68(4).