IAI Actuarial Core Principles · Business Economics · Impact of the macroeconomic environment on business
Which of the following is an example of structural unemployment?
The textile worker displaced by automation and lacking skills for existing vacancies is structurally unemployed, because there is a lasting mismatch between skills and available jobs. The other cases are seasonal, frictional, cyclical or voluntary unemployment.
- AA tourism guide out of work during the monsoon off-season
- BA graduate spending three weeks looking for the first suitable job
- CA textile worker made redundant as mills automate and who lacks skills for available vacanciesCorrect
- DA construction worker laid off during a general fall in aggregate demand
- A worker who chooses not to accept available jobs at the going wage
Explanation
Structural unemployment arises from a mismatch between workers' skills or location and the jobs available, often after technological or industry change. Seasonal, frictional and cyclical unemployment describe the first, second and fourth cases. The last case is voluntary unemployment.
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