Causes of unemployment

One cause of unemployment may be downswings in the trade cycle, i.e. periods of recession. Another explanation of wide-scale unemployment refers to structural employment, structural unemployment arises from longer-term changes in the economy, affecting specific industries, regions, and occupations. Structural unemployment often explains regional unemployment. Some regions of the UK such as Central Scotland and the North-West have higher rates of unemployment because the traditional heavy industries which are located there have gone into decline as they are replaced by cheaper imports from abroad. The new high-tech industries based on new technologies tend to be based in the South-East and along particular growth corridors.