Unemployment refers to a situation when a person is without a job (an activity undertaken in return for an income in cash or kind) and is looking for one.

Types Of unemployment

Open unemployment:  

The laborers do not find a work to do. Unskilled labour unemployment is included in this category of unemployment.

Educated unemployment: 

Even an educated or skilled person fails to get suitable employment.  This is one of the major problems for developing countries like India.

Under employment: 

The person is engaged in work but his efficiency and capability is not being utilised to the optimum level.

Seasonal unemployment : 

This arises because demand for labour changes with seasons and so workers get employment only in the peak season like harvesting and sowing seasons in agriculture.

Frictional unemployment: 

The unemployment results due to changes in demand and supply conditions in the market. It results when workers are shifting over from one job to another.

Voluntary unemployment: 

There are jobs and people are not ready to take job at the prevailing wage rate. This generally exists in advanced countries at large.

Involuntary employment:

This type of unemployment exists in developing countries, in which people want to do job, but they do not get the job.

Technical unemployment: 

Unemployment caused due to change in technology. Under new technique, more production can be done with less number of workers. Its immediate effect is retrenchment of workers. But, it is important to note that technological unemployment is temporary.

Functional unemployment 

Functional unemployment occurs when people change from one job to another and there is an interval. This can happen even in a situation of full employment.

Structural unemployment

Structural unemployment happens when jobs exist for qualified persons but the unemployed do not have the matching qualifications. Structural unemployment can also occur when labour is available in plenty but other factors of production (land, capital and enterprise) are not there to employ the labour.

Cyclical unemployment

Cyclical unemployment refers to a situation where people are thrown out of job due to a recession. This is also known as demand ‘deficiency unemployment’, as the root cause for this type of unemployment is lack of aggregate demand.

 Disguised unemployment

 Disguised unemployment is when people are apparently employed but their marginal product is zero. Even if they are removed from the activity, there will be no decline in production. This type of employment is a feature of Indian agriculture. According to the 10th Plan document, this type of unemployment accounts for 9 % of the labour force and I3 % of the youth.

Magnitude of Unemployment:

Due to the existence of diverse forms of unemployment no single measure can adequately capture the magnitude of unemployment in India. In addition to the decadal Census figures, the National Sample Survey Organisation (NSSO) conducts more detailed sample surveys every five years on employment and unemployment. It uses three different tests for measuring-%

 The Usual Status (US) concept which has reference to period of one year and classifies a person as employed or unemployed on the basis of his activity for the major part of the year.

The Current weekly Status (CWS) includes a person if he has not worked even for one hour during the week, though available for work.

 The Current Daily Status (CDS) measured all days of employment/unemployment as well as underemployment during the reference week.

Chronic unemployment can be measured by US and CWS data. However, for policy formulation regarding supplementary employment all the three sets of data are used in conjunction. The Planning Commission and NSSO have been using the CDS data as this gives a more realistic estimate.

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