A new textile machine replaces hand weavers. Jobs exist in the town for machine operators, but the weavers do not have the skills for them and stay out of work for years. Which type of unemployment is this?
- The weavers are not simply between jobs for a short time, so it is not frictional.
- The cause is not a general fall in demand, so it is not cyclical.
- Jobs exist, but the skills of the workers do not match them because the industry has changed.
- A lasting mismatch between skills and available jobs is structural unemployment.
Answer: Structural unemployment.