When individuals are out of work because they do not have the skills necessary to perform available jobs,we call this

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Structural unemployment arises when the demand for certain skills and jobs decreases or disappears due to changes in technology, industry, or labor markets. Workers who lack necessary skills or experience become structurally unemployed, as they cannot fit into the new jobs and industries that continue to develop. This type of unemployment is different from frictional unemployment, which results from workers switching between jobs or moving to new areas, and cyclical unemployment, which is caused by fluctuations in overall economic activity. The natural rate of unemployment refers to the level of unemployment that occurs when the labor market is in equilibrium and is not related to any particular type of unemployment. Full employment is the level of unemployment that results when the labor market is functioning efficiently, but it is typically not zero, as some people may be temporarily between jobs or seeking new ones.

When Individuals Are Out of Work Because They Do Not