Structural unemployment

July 2019, Paper II
Q) The long term chronic unemployment arising from imbalance between the skills and other characteristics of workers in the market and the need of employees is known as?
a) Cyclical unemployment
b) Frictional unemployment
c) Structural unemployment
d) Seasonal unemployment
Answer C
Structural unemployment refers to a mismatch between the jobs available and the skill levels of the unemployed. The supply of labour is higher than the demand of labour at the given wage. Cyclical unemployment is unemployment that results when the overall demand for goods and services in an economy cannot support full employment. It occurs during periods of slow economic growth or during periods of economic contraction. Frictional unemployment is a type of unemployment. It is sometimes called search unemployment and can be based on the circumstances of the individual. It is time spent between jobs when a worker is searching for a job or transferring from one job to another. It’s voluntary in nature. Seasonal unemployment occurs when people are unemployed at particular times of the year when demand for labour is lower than usual.