This thesis is addressed to the theoretical controversy which revolves around the explanation of the higher unemployment rates that prevailed after 1957 . The debate that has been generated concerning the causes of this unemployment problem is usually referred to as the "structural" versus "deficient-demand" debate. An attempt is made to present a representative view of both sides of the debate as well as a critical evaluation of both positions. Care is taken to keep both positions separated for each leads to entirely different policy recommendations. A more general theoretical structure is presented which will be useful in analyzing the relevance of structural unemployment. Finally, the controversy is analyzed in terms of current economic development.