Structural unemployment: causes and consequences

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structural unemployment is the name given to the loss of work and the extinction of professions caused by structural changes in the economy or in the production, especially related to technological modernization and the incorporation of automation into the production process and life everyday. It is a type of unemployment definitive, which demands from the worker a better qualification for his reintegration in the labor market. When this does not happen, the tendency is for an increase in informality.

See too: Industrial Revolution — the replacement of manufacturing work with industrial work

Topics in this article

  • 1 - Summary on structural unemployment
  • 2 - What is structural unemployment?
  • 3 - Examples of structural unemployment
  • 4 - What are the causes of structural unemployment?
  • 5 - What are the consequences of structural unemployment?
  • 6 - Differences between structural unemployment and cyclical unemployment
  • 7 - Structural unemployment in Brazil
  • 8 - Other types of unemployment

Summary on structural unemployment

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  • Structural unemployment corresponds to the dismissal of individuals and the loss of jobs as a result of structural changes in the production process and the economy.

  • The main cause of structural unemployment is the automation of production stages and the technological modernization of different tasks of daily life.

  • It is a type of permanent (or permanent) unemployment.

  • Among its consequences is the increase in informality and underemployment, due to the difficulty of workers to re-enter the formal market.

  • It is a type of unemployment that has grown in Brazil in recent decades.

  • Structural unemployment is just one of the types of unemployment, which can also be conjunctural, natural or seasonal.

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What is structural unemployment?

Structural unemployment is a type of unemployment characterized by loss or extinction of jobs as a result of structural changes effected in the economic and productive system, in the production process, in the economy of a territory or within a company.

Is more commonly associated with technological advancement in general, which leads to the incorporation of new technologies in the production process and the complete or partial automation of production and the execution of daily tasks. In this context, unemployment tends to be definitive, thus there is a need for the individual to readjust so that he can achieve his reintegration into the labor market.

Examples of structural unemployment

Structural unemployment can be seen in the modernization of telecommunications, which has made some professions obsolete. One of these professions is operator, occupation of the people responsible for transferring calls and providing information via telephone to those who called at the switchboard. Currently, with cell phones and internet access anywhere, the user himself performs these functions.

A more recurrent example is the mechanization of production processes in the field, such as planting and harvesting. In many rural properties, all the procedures carried out in the fields are carried out by machines, thus eliminating the need for human labor in the field and causing the extinction of certain jobs. We can also mention the removal of bus collectors, replaced by electronic tickets that automatically release the turnstiles and, more recently, payment made by cell phone.

What are the causes of structural unemployment?

The main cause of structural unemployment is the automation of the production process and the adoption of new technologies in the most different stages of production, whether in industry or in the activities of the primary and tertiary sectors, which leads to the replacement of human labor by the work of one or several machines.

From the employer's point of view, this transformation makes work more efficient while helping to reduce production costs. From the worker's point of view, however, the introduction of machinery leads to the loss of work and, in many cases, the extinction of certain jobs. In that regard, the low qualification of workers tends to be an aggravating factor which makes it difficult for them to be re-employed in other jobs.

THE modernization of everyday life and the computerization of tasks, which are characteristics of the current technical and scientific period in which we live, are also among the causes of structural unemployment in the modern world.

Likewise, the advent of globalization and the transformations engendered in the international economic and financial system introduced new demands and productive needs that led to the reorganization of several segments of the economy, leading to structural unemployment.

What are the consequences of structural unemployment?

Structural unemployment has a series of consequences that mainly affect the population. We list below some of the impacts of this phenomenon:

  • increase in the general unemployment rate;

  • increased demand for new job openings, which are often non-existent;

  • inability to reabsorption of the laid-off workforce;

  • growth in informality, underemployment and the number of self-employed workers;

  • greater contingent of poverty and deepening of social differences;

  • loss of quality of life for the individual who was fired;

  • increase in the number of discouraged people, who are unemployed and are not looking for a replacement in the market.

Read too: Informal work — a feature of transformation processes in the labor market

Differences between structural unemployment and cyclical unemployment

Conjunctural unemployment differs from structural unemployment in its causes and duration. Generated by conjunctural issues, cyclical unemployment associate to economic, political or health crises that are installed on a regional, national or global scale and that lead to layoffs, company closures, suspension of services, cost cutting and other consequences.

Unlike structural unemployment, cyclical unemployment tends to be temporary, with the recreation of the job or rehiring after the reestablishment of the conjunctural balance.

Structural unemployment in Brazil

structural unemployment has grown significantly in Brazil in the last three decades, notably from the 1990s onwards, initially motivated by the expansion of industrial automation and later deepening because of the difficulty that many workers face, which is to find a new job and formally re-enter the Marketplace.

The reasons for this are varied, the main one being the low professional qualification. According to a BBC News report from 2021|1|, the level of structural unemployment in recent Brazil already exceeds that of developed countries.

With the expansion of structural unemployment in Brazil, what was observed was the growth of the rate of people seeking their livelihood through precarious or informal work, still acting as self-employed workers, which expanded this category in the country.

Other types of unemployment

Structural unemployment and cyclical unemployment are not the only two dimensions of this phenomenon. There are still two other types of unemployment.

  • Natural or frictional unemployment: corresponds to occasional or momentary unemployment, generally attributed to people who are in the search for their first job or those recently laid off or terminated from their old jobs and who are looking for a new job.

  • Seasonal unemployment: corresponds to unemployment that occurs with a certain interval and affects specific sectors, such as the tourism, at the end of the high season; commerce, after the temporary hiring of periods of greater demand, such as commemorative dates; and the agriculture, when the harvest of a particular crop comes to an end and workers are laid off.


|1|CARRANÇA, Thais. Even after the crisis generated by the pandemic, Brazil will have 10 million unemployed, say economists. BBC News Brazil, 23 July. 2021. Available here.

By Paloma Guitarrara
Geography teacher

Would you like to reference this text in a school or academic work? Look:

GUITARRA, Paloma. "Structural unemployment"; Brazil School. Available in: Accessed on July 16, 2022.
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