In labour economics, structural unemployment arises mainly due to which of the following types of causes?

Introduction / Context:
The question deals with structural unemployment, which is one of the important types of unemployment studied in macroeconomics and labour economics. Understanding the different types of unemployment, such as frictional, cyclical and structural, is essential for analysing employment policies and the impact of economic development strategies. Structural unemployment is linked to long run changes in the structure of an economy rather than short term ups and downs in demand.

Given Data / Assumptions:

• The question specifically mentions structural unemployment.
• We are asked to identify the main type of cause that gives rise to this form of unemployment.
• The options refer to deflationary conditions, heavy industry bias, shortage of raw materials and inadequate productive capacity in a downturn.
• We assume standard textbook definitions of structural versus cyclical and frictional unemployment.

Concept / Approach:
Structural unemployment arises when there is a mismatch between the skills or location of workers and the pattern of jobs available in the economy. This usually happens because of long term structural changes, such as a shift from agriculture to industry, from industry to services, adoption of new technologies, or a development strategy that emphasises heavy, capital intensive industry. In such situations, some workers may no longer have the skills demanded by new sectors, or jobs may move to new regions while workers remain elsewhere. This is different from cyclical unemployment, which is caused by short term fluctuations in overall demand, and different from frictional unemployment, which arises from normal job search and transition. Therefore, any option that captures long run structural changes, such as a heavy industry bias that changes the composition of labour demand, is closest to the correct explanation of structural unemployment.

Step-by-Step Solution:
Step 1: Recall that structural unemployment is associated with changes in the structure of the economy and long term mismatches in skills and jobs.Step 2: Note that deflationary conditions and inadequate productive capacity in a recession are typical causes of cyclical or demand deficient unemployment.Step 3: Observe that a short term shortage of raw materials is a temporary supply disturbance and does not permanently change the structure of employment.Step 4: Recognise that a development strategy with a heavy industry bias and other structural changes alters the pattern of labour demand in a lasting way and can create structural unemployment, making that option the best answer.

Verification / Alternative check:
You can verify this understanding by considering how economies transform over decades. When economies move from labour intensive agriculture to capital intensive heavy industry, some rural workers may not have the education or skills required in factories. Later, when economies move from heavy industry to high technology services, some factory workers may again find their skills obsolete. These are classic examples of structural unemployment. In contrast, a general fall in demand during a recession or a deflationary phase leads to cyclical unemployment, which can reduce once demand recovers, without necessarily changing the structure of jobs. This comparison confirms that structural unemployment is linked to structural changes, not short term demand conditions.

Why Other Options Are Wrong:
Option A is wrong because deflationary conditions are primarily associated with cyclical or demand deficient unemployment, not structural unemployment. Option C is incorrect because a shortage of raw materials is usually temporary and sector specific, not a broad structural shift. Option D is also incorrect because inadequate productive capacity in a downturn describes a cyclical slump, not a long term change in the pattern of labour demand. Only option B, which refers to heavy industry bias and long run structural changes, aligns with the concept of structural unemployment.

Common Pitfalls:
Students often confuse structural unemployment with cyclical unemployment because both involve job losses. Another common mistake is to equate any problem in the economy with structural issues, even when the cause is clearly a short term fall in demand. To avoid these errors, remember that cyclical unemployment moves with the business cycle, while structural unemployment persists even when the overall economy recovers, because the underlying structure of industries and skills has changed. Linking structural unemployment with long lasting changes in technology, sectoral composition and development strategy will help you select the correct option in such questions.

Final Answer:
Structural unemployment arises mainly due to long run structural changes, such as a heavy industry bias that alters the pattern of demand for labour.