Structural unemployment is caused by fundamental shifts in an economy resulting in industries (or segments of industries) going through changes so major that the jobs they sustained either disappear or require new skills. Structural unemployment occurs for a number of reasons – workers may lack the requisite job skills, or they may live far from regions where jobs are available but are unable to move there. Or they may simply be unwilling to work because existing wage levels are too low. So while jobs are available, there is a serious mismatch between what companies need and what workers can offer. Structural unemployment is exacerbated by extraneous factors such as technology, competition and government policy, and is independent from the business cycle – it can create a higher unemployment rate even after a recession is over.
Amadeo, Kimberly. “Structural Unemployment.” About News. Online: http://useconomy.about.com/od/suppl1/g/Structural-Unemployment.htm (Retrieved on August 8, 2014)
Investopedia, “Structural Unemployment.” Online: http://www.investopedia.com/terms/s/structuralunemployment.asp (Retrieved on August 8, 2014)