Structural Unemployment

Structural unemployment exists when an individual's marginal value to any employer is lower than the minimum wage conventionally or legally payable (in the limit, a person's value could be zero, in which case their value is lower than any wage payable). This is the main constituent of most countries' unemployment statistics. Since being active in searching for work is usually a part of the definition of (involuntary) unemployment, some (perhaps many) who are structurally unemployed are not included in unemployment statistics because after a time these people may have become so convinced that they will not find a job that they stop trying. Structural unemployment frequently accompanies the wholesale decline of industries that are geographically concentrated.

Subgroup Analysis 331

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