Which statement best describes structural unemployment?

• A. Unemployment that exists because workers are temporarily between jobs or entering the labor force and searching for the best match.
• B. Unemployment caused by seasonal patterns in production and employment over the year.
• C. Unemployment that results from a mismatch between workers’ skills or locations and the requirements or locations of available jobs, often due to long-run changes in the economy.
• D. Unemployment that occurs because the economy is in a recession and aggregate demand is insufficient.

Answer: (C)

Verified step by step guidance

1. Step 1: Understand the concept of structural unemployment. It occurs when there is a fundamental mismatch between the skills or locations of workers and the requirements or locations of available jobs.
2. Step 2: Recognize that structural unemployment is different from frictional unemployment, which is temporary and due to workers transitioning between jobs or entering the labor force.
3. Step 3: Distinguish structural unemployment from seasonal unemployment, which arises from predictable seasonal changes in labor demand.
4. Step 4: Differentiate structural unemployment from cyclical unemployment, which is caused by insufficient aggregate demand during economic downturns or recessions.
5. Step 5: Conclude that the best description of structural unemployment is the one emphasizing long-run changes in the economy that cause a mismatch between workers' skills or locations and job requirements or locations.