Question

Discuss the causes and consequences for structural unemployment

Answer 1

Structural unemployment is caused by a mismatch of skills between the unemployed and available jobs.this is caused by changes in the economy such as deindustrialization,which leaves some unemployed workers unable to find work in new industries with different skill requirement.this is occurs even during periods of strong economic growth.it is a form of supply side unemployment and not insufficient aggregate demand.policies to reduce structural unemployment includes retraining and geographical subsidies.fiscal or monetary policy to boost AD will be ineffective in solving structural unemployment.structural unemployment is caused by geographical immobilities i.e when workers are unable to move from areas of high unemployment to areas with labour shortage.Occupational immobilities is when after change in economy which lead to shifting demand for skilled labour.