Which of the following best characterizes structural unemployment within an economy?

💡 Solution & Explanation

Structural unemployment occurs when technological shifts or industrial reorganization creates a permanent mismatch between the existing skills of workers and the requirements demanded by employers. Cyclical unemployment arises from downturns in the business cycle, whereas frictional unemployment relates to people temporarily moving between jobs. Seasonal variations characterize agriculture and tourism job patterns rather than fundamental structural shifts. Skill retraining programs are often implemented by labor ministries to mitigate long-term structural displacement.