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Key Concepts

Structural Unemployment

Structural unemployment occurs when there is a mismatch between the skills available in the workforce and the skills demanded by employers due to changes in the economy, technology, or market dynamics. It is not caused by temporary fluctuations in the business cycle, but by long-term shifts that render certain skills obsolete or in less demand.

Technological Change

Technological change can lead to the obsolescence of certain job roles by automating processes or introducing new methods that require different skills. As production methods evolve, workers whose skills are based on older technology may find themselves unable to secure new employment without retraining.

Skill Mismatch

Skill mismatch happens when the qualifications and abilities of workers do not align with the requirements of available jobs. This misalignment can be due to rapid changes in industries where emerging technologies and new business models create a demand for skills that the current workforce may not possess.

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