PRIYANKA H MEHTA 1/16/18
UNEMPLOYMENT
PATH OF THE PRESENTATION
1/16/18
• Introduction to Unemployment.
• Forms of Unemployment.
• Nature of Unemployment in India.
• Ways to Measure Unemployment.
• Causes of Unemployment.
PRIYANKA H MEHTA
INTRODUCTION TO UNEMPLOYMENT
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• Every 6th person in the world is an Indian and every 3rd poor
person in the world is also an Indian.
• With Increase in the number of unemployed persons,
Poverty expands.
• The problems of unemployment and poverty is Very High
which demands an immediate solution.
• Till 5th Five Year Plan, no serious efforts were taken to solve
the unemployment problem.
• It was assumed that the gains of economic growth would
percolate downwards and the inequalities would decline and
problems of poverty and unemployment would get solved
automatically.
Cont:
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• But after the Fifth Five Year Plan, removal of
unemployment became as one of the important
Objectives of economic planning in all five
year plans.
• In less developed countries economic growth
generally benefits the elite groups and, as a
result, economic Inequality grow.
• India is facing the same problem of Inequalities.
WHAT IS
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UNEMPLOYMENT?
• A person who is not gainfully employed in any
productive activity is called as unemployed and
collectively it is called as Unemployment.
PRIYANKA H MEHTA 1/16/18
Forms of
6 Unemployme
nt
Voluntary Frictional
Unemploym Unemploym
ent ent
Casual Chronic
unemploym unemploy
ent ment
Seasonal Disguised
unemployme unemployme
nt nt
Structural Cyclical
Unemploym unemploym
ent ent
Technologic
al
unemploym
ent
PRIYANKA H MEHTA 1/16/18
7 VOLUNTARY UNEMPLOYMENT
• There are some people who are unwilling work
at the prevailing wage rate,or
• There are some people who get a continuous
flow income from their property or other
sources and need not work.
Voluntary Unemployment is a National waste of
human energy.
PRIYANKA H MEHTA 1/16/18
8 FRICTIONAL UNEMPLOYMENT
• Temporary phenomenon.
• Results when some workers are temporarily out
of work while changing jobs.
• Also result when the work is suspended due to
strikes or lockouts.
• Frictional unemployment is caused by imperfect
mobility of labour.
PRIYANKA H MEHTA 1/16/18
9 CASUAL UNEMPLOYMENT
• Here workers are employed on a day to day
basis.
• In generally exist in Construction, catering or
agriculture industries.
• It occurs due to short-term contracts, which are
terminable any time.
PRIYANKA H MEHTA 1/16/18
10 CHRONIC UNEMPLOYMENT
• When unemployment tends to be a long- term
feature of a country it is called chronic
unemployment.
• Underdeveloped countries suffer from chronic
unemployment on account of :-
• vicious circle of poverty
• lack of developed resources and their under
utilization
• high population growth
• backward & even primitive state of
technology
• low capital formation, etc.
PRIYANKA H MEHTA 1/16/18
11 SEASONAL UNEMPLOYMENT
• Industries such as agriculture, the catering trade,
trade in holiday resorts, some agro-based
activities like sugar mills and rice mills, provide
jobs of seasonal nature which are for certain
period.
• People engaged in such type of work or activities
may remain unemployed during the off-season.
• So it is Seasonal Unemployment.
PRIYANKA H MEHTA 1/16/18
12 DISGUISED UNEMPLOYMENT
• When some workers have zero marginal
productivity so that their removal will not affect
the volume of total output.
• Disguised unemployment implies
underemployment of labour.
• This kind of unemployment is a common feature
of under developed economies especially of
their rural sector.
• In short, overcrowding in an occupation leads to
disguised unemployment.
Cont:-
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• Suppose, a family farm is properly
organized and 4 persons are working
on it. If, however, 2 more workers are
employed on it and there is no change
in output, we may say that these 2
workers are Disguisedly Unemployed.
PRIYANKA H MEHTA 1/16/18
14 STRUCTURAL UNEMPLOYMENT
• Due to structural changes in the economy,
Structural Unemployment may result.
• Caused by:-
1)decline in demand,
2)disinvestment,
3)reduction in its manpower requirement.
• In fact, structural unemployment is a natural
concomitant of economic progress and innovation
in a complex industrial economy of modern times.
PRIYANKA H MEHTA 1/16/18
15 CYCLICAL UNEMPLOYMENT
• Capitalist biased, advanced countries are subject to trade
cycles.
• Trade cycles are especially recessionary and depressionary
phases causing cyclical unemployment in these countries.
• During the contraction phase of a trade cycle in an economy,
aggregate demand falls and this leads to disinvestment,
decline in production and rise in unemployment.
The solution for cyclical unemployment lies in measures for
increasing total expenditure in the economy, thereby pushing up
the level of effective demand. Easy policy and fiscal measures
such as Deficit Financing may help.
PRIYANKA H MEHTA 1/16/18
16 TECHNOLOGICAL UNEMPLOYMENT
Due to the introduction of new machinery,
improvement in methods of production, labour-
saving devices, etc., some workers tend to be
replaced by machines.
Their unemployment is termed as technological
unemployment.
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17 NATURE OF UNEMPLOYMENT IN
INDIA
Unemployme
nt
Urban Rural
Industrial Educated
Seasonal Disguised
Unemploym Unemploym
Unemploym Unemploym
ent ent
ent ent
PRIYANKA H MEHTA
CONT:- 1/16/18
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Most of the unemployment in India is definitely
structural, that is, the structure of the economy is
such that it does not absorb an increasing number
of people coming to labour market in search of jobs.
Industrial Unemployment results when industrial
sector fails to absorb the increasing labour force.
Also, Cyclical Unemployment is the result of
Industrial Recession in urban areas.
Educated Unemployment results when a large
number of educated people remain unabsorbed.
It is estimated that over 1/3rd of India's work force
is Disguisedly Unemployed.
PRIYANKA H MEHTA Ways to measure 1/16/18
19 Unemployment
• Usual Status: This measure estimates the number of
persons who may be said to be chronically
unemployed. This measure generally gives the lowest
estimate of unemployment especially for a poor
economy because only a few can afford to remain
without work over a long period.
• Current Weekly Status (CWS): This estimate reduces
the reference period i.e. the period for which data is
collected to one week. According to this estimate a
person is said to be employed for the week even if he
is employed only for a day during that week.
• Current Daily Status (CDS): The reference period
here is a day. It counts every half day's activity status
of the respondent over the week.
CAUSES OF UNEMPLOYMENT
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• Jobless Growth.
• Increase in Labour Force.
• Inappropriate Technology.
• Inappropriate Educational System.
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