Which term describes unemployment that occurs due to a mismatch between the skills workers have and the skills demanded by new technologies?

• A. Seasonal unemployment
• B. Frictional unemployment
• C. Cyclical unemployment
• D. Structural unemployment

Answer: (D)

Structural unemployment occurs when the skills workers have no longer align with the jobs that new technologies require. When automation or digital changes shift what the economy needs, those with outdated or incompatible skills can’t find suitable work without retraining or relocating. This type tends to be longer-lasting because addressing the mismatch isn’t solved by a quick job search; it requires education, retraining programs, or a move to where demand is higher. For example, automation in manufacturing may reduce demand for routine labor while increasing demand for technicians who can design, install, and maintain automated systems. By contrast, seasonal unemployment comes and goes with the rhythm of the year, frictional unemployment is the short-term gap as people move between jobs, and cyclical unemployment follows the ups and downs of the economy.