Economics for SSC Exam

Unemployment

Unemployment can be defined as a situation when person able and willing to work are seeking jobs at the prevailing wage level but they are unable to get the same.

In India, unemployment-

Seasonal unemployment: it is a type of frictional unemployment that occurs in specific activities or occupations which are characterized by seasonal work. An example of seasonal unemployment is the joblessness during non-cultivation in rural areas.

 Natural rate of unemployment: the sum total of frictional and structural unemployment is referred as the natural rate of unemployment.

Structural unemployment: unemployment resulting from a mismatch between demand in the labour market and the skills and locations of the workers seeking employment. E. g. when computer were introduced there were jobs but people could not match the skills required to operate the computer resulting in unemployment.

Frictional Unemployment: Frictional Unemployment is transitional unemployment due to people moving between jobs. It refer to a transition period of looking for a new job for different reasons such as seeking a better job being fired from a current job or having voluntarily quit a current job.

Seasonal Unemployment: Periodic unemployment created by seasonal variation in particular industries. E.g. in the period between past harvest and next sowing, agriculture labourers are unemployed.

Educated Unemployment: this is mainly found in urban areas. Those educated persons who are unable to get work come under this category.

Open employment: open unemployment arises when a person voluntarily or involuntarily keeps himself/ herself out of consideration for certain jobs.

It is important to note that the type and nature of unemployment differs significantly in developing and developed countries. Unemployment in developed countries arises due to the lack of effective demand or economic slowdown, recession, or depression. In developing countries, unemployment occurs largely due to a lower demand for labour or inadequate employment opportunities in the economy. Such a situation occurs due to the subsistence nature of agriculture, a low industrial base and the small size of the tertiary sector. Let us now discuss the various concepts of unemployment applicable to developing nations including India.

All developing countries including India suffer from structural unemployment which exists both in open and disguised forms.