Which of the following statements exemplifies the concept of structural unemployment?

• A. A recent college graduate is searching for their first job after graduation.
• B. A factory worker loses their job because the factory relocates overseas and their skills are no longer in demand locally.
• C. An employee is fired for poor performance and is looking for a new job.
• D. A construction worker is temporarily laid off during the winter months due to reduced demand.

Answer: (B)

Verified step by step guidance

1. Understand the definition of structural unemployment: it occurs when there is a mismatch between the skills workers have and the skills needed for available jobs, often due to technological changes, shifts in the economy, or relocation of industries.
2. Analyze each statement to see if the unemployment is caused by a skills mismatch or a fundamental change in the economy rather than temporary or performance-related reasons.
3. Identify that a recent college graduate searching for their first job is an example of frictional unemployment, as they are transitioning between education and employment.
4. Recognize that an employee fired for poor performance is experiencing unemployment due to individual circumstances, not structural changes in the economy.
5. Note that a construction worker laid off during winter is an example of seasonal unemployment, which is temporary and related to demand fluctuations, not structural changes.