Which type of unemployment is caused by shifts in the economy that result in a mismatch between workers' skills and job requirements?

Structural unemployment occurs when there is a fundamental change in the economy that alters the demand for certain skills or jobs. This form of unemployment arises from technological advancements, changes in consumer behavior, or shifts in industry dynamics that create a gap between the skills workers possess and those that employers need. For instance, if a manufacturing process becomes automated, workers whose skills are focused on manual labor may find themselves unemployed because their capabilities no longer match the job requirements.

This type of unemployment is not temporary and often requires workers to acquire new skills or undergo retraining to access available jobs in the evolving job market. In contrast, other types of unemployment, such as cyclical, is closely related to economic downturns, frictional unemployment is a natural transition phase as individuals move between jobs, and seasonal unemployment is related to seasonal demands in certain industries. Thus, structural unemployment uniquely emphasizes the economic shifts that create a lasting skills mismatch.