Structural unemployment occurs when there is a mismatch between jobs

and skills in the economy

 It usually happens as the structure of an
economy changes e.g. the secondary
sector is declining and the tertiary sector is
growing
 There is no longer a need for a specific type
of worker e.g. ship builders in Glasgow
 Many Western industries have relocated
production to China causing structural
unemployment in their economies
 Unless workers receive help to retrain, they
are often left unemployed or under-
employed

is caused by a fall in AD in an economy

Cyclical or demand
 This typically happens during a slow
deficient unemployment down or recession
 The demand for labour is a demand
derived from the demand for
goods/services
 As output falls in the economy, firms lay
off workers

Seasonal unemployment occurs as certain seasons come to an

end and labour is not required until
the next season
 E.g. fruit pickers; summer
seaside resort workers; ski
instructors

occurs when wages are inflexible at a point higher

Real wage unemployment than the free-market equilibrium wage
 Usually caused by the existence
of minimum wage laws
 The higher wage creates an excess supply
of labour
 This excess supply represents real wage
unemployment