An attempt was made in this study to clarify the concept of structural unemployment, defined as the amount of unemployment (less minimum frictional and seasonal unemployment) that remains at the level of demand which is consistent with general price stability. A principle objective of the study was to examine in some detail the changes in the characteristics of the labo r force during recent years in an attempt to estimate the target unemployment rate, that point where additional increases in demand would produce continuing inflation as a result of labor shortages. This was done by measuring the contribution to structural unemployment of skill shortages, regional demand patterns, and employability of youths and Negroes and by determining whether structural unemployment from these sources had changed since 1953. It was concluded that 3.7 percent is the upper limit of a band of unemployment rates within which the borderline of conditions of significant labor shortages is located. This includes a maximum estimate of 2.3 percent of the labor force as structurally unemployed. Detailed discussion of methods and computations is included. (ET)