Kevin has lost his job in an automobile plant because the company switched to robots for its welding step in the assembly line. Kevin plans to go to technical school to learn how to repair microcomputers. The type of unemployment Kevin is faced with is _________.

Structural unemployment is a type of unemployment that is caused by the divergence between the skills that is possessed by the unemployed population and the jobs that are available in the market. Structural unemployment is a long-lasting event which is as a result of fundamental changes in the economy.

Structural unemployment can be caused by the following:

(a) Technological advancement

Technological advancements can significantly have an affect on the economy. The introduction of new technologies can make some of the current jobs to become outdated, thereby leaving many people unemployed.

(b) Competition

Competition could also lead to structural unemployment in an economy. For example, globalization is one of the factors behind the high rate of competition experienced around the world. Developing countries generally provide cheap labor; many companies from this developed countries move their manufacturing facilities to developing nations. As a result, workers who were previously involved in manufacturing process becomes unemployed.