What type of unemployment is caused by the adoption of new technology?

Technological unemployment occurs when advancements in technology lead to the reduction of jobs because machines or automated processes replace human labor. This form of unemployment is specifically linked to the introduction of new technologies that render certain skills obsolete or reduce the need for specific roles. For example, as companies adopt more automated systems or sophisticated machinery, workers who previously performed tasks now done by technology may find themselves unemployed because their skills no longer align with market needs.

While frictional unemployment refers to short-term unemployment that occurs when individuals are between jobs or entering the workforce, transitional unemployment is not a widely defined category in employment literature. Structural unemployment involves a mismatch between workers' skills and the needs of the labor market, which can also include factors such as geographic displacement. However, technological unemployment specifically highlights the impact of technology on job availability and directly links the two, making it the most appropriate choice.