What causes structural unemployment Essay Example | Topics and Well Written Essays - 1500 words

What causes structural unemployment - Essay Example In most cases, unemployment occurs when the economy in the recession. Globally, more than 200 million people are unemployed which is equivalent to 6% of the global workforce. There are different types of unemployment. These include classical unemployment, cyclical unemployment, structural unemployment, frictional unemployment and hidden unemployment. This paper seeks to discuss about the causes of structural unemployment as well as the ways of dealing with this kind of unemployment. Structural unemployment is defined as a type of unemployment whereby at a given wage level, the labour demanded is lower that the labor supplied. This happens when there is a mismatch between the number of jobs available in the economy and the number of people who are willing to work (Romer, 2011). The mismatch may occur if the unemployed individuals lack the necessary skills as needed by the organizations or they may be residing in different parts of the country far from where the job opportunities are available. Being one of the permanent types of unemployment, most economists argue that improvement on causes of structural unemployment can only take place in the long run. Based on the changing level of technology and obsolescence of certain technology, some experts and systems become of less importance (Ford, 2009). For example, with the emergence of modern forms of printing by use of computers, the use typesetters became insignificance. Another scenario of structural unemployment can be indicated when the economy experience an increase in the level efficiency. In most cases, when any of the economy sectors has high level of efficiency, the number of workers required goes down. For example, by mechanizing the work in the agricultural sector, few employees are needed to carry out the duties in the sector. This implies that some individuals who have qualification in agricultural related