Which of the following types of unemployment arises from a mismatch between the jobs available in the market and the skills of the available workers in the market?
Show answer & explanation
Correct answer: C
Explanation
The correct answer is Option 3 i.e. Structural.
- Structural unemployment arises from the mismatch between the jobs available in the market and the skills of the workers available in the market.
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Structural unemployment arises when long-term shifts in the economy—often driven by technological advancements—alter the demand for specific skills and jobs. As the structure of industries changes, certain roles become outdated, leading to unemployment among workers whose skills are no longer required in the evolving labor market.
- Technological advancements can result in workers losing their jobs when certain roles become obsolete. This happens when machines or new methods replace traditional ways of working.
- For example, the shift from horse-drawn carriages to automobiles or the automation of production lines in factories led to reduced demand for manual labor, contributing to structural unemployment.
Other Options:
Frictional Unemployment:
- This form of unemployment is typically short-term and arises when individuals voluntarily leave their jobs to seek new opportunities. It is considered the least concerning from an economic perspective, as it often reflects a dynamic and flexible labor market.
Seasonal unemployment
- This happens at different times throughout the year as seasonal patterns affect jobs. Some examples include ski instructors, fruit pickers, and holiday-related jobs.