E-CONTENT ON UNEMPLOYMENT

      UNEMPLOYMENT

 

OBJECTIVES

1. To understand the concept of unemployment.

2.To measure the extent of joblessness .

3.To identify types of unemployment

4.To understand causes of unemployment.

5.To plan employment policies.

ABSTRACT

Unemployment is a major economic problem that occurs when people willing to work cannot find jobs. It takes different forms such as disguised, structural, seasonal, technological, cyclical, and frictional. The main causes include population growth, lack of skills, and limited job opportunities, leading to poverty, reduced productivity, and social issues. Effective solutions lie in skill development, industrial growth, self-employment, and government initiatives.

VIDEO 

https://youtu.be/j_pC3Q5BFGI

DEFINITION OF UNEMPLOYMENT

Unemployment is a situation when a person actively searches for a job and is unable to find work. Unemployment indicates the health of the economy.

The unemployment rate is the most frequent measure of unemployment. The unemployment rate is the number of people unemployed divided by the working population or people working under labour force.

TYPES OF UNEMPLOYMENT 

 

1. Disguised Unemployment: This is a type of unemployment where people employed are more than actually needed. Disguised unemployment is generally traced in unorganised sectors or the agricultural sectors.

2. Structural Unemployment: This unemployment arises when there is a mismatch between the worker’s skills and availability of jobs in the market. Many people in India do not get job matching to their skills or due to lack of required skills they do not get jobs and because of poor education level, it becomes important to provide them related training. 

3. Seasonal Unemployment: That situation of unemployment when people do not have work during certain seasons of the year such as labourers in India rarely have occupation throughout the year.

4.Technological Unemployment: the situation when people lose their jobs due to advancement in technologies. In 2016, the data of the World Bank predicted that the proportion of jobs threatened by automation in India is 69% year-on-year.

5.Cyclical Unemployment: unemployment caused due to the business cycle, where the number of unemployed heads rises during recessions and declines with the growth of the economy. Cyclical unemployment figures in India are negligible. 

6.Frictional Unemployment: this is a situation when people are unemployed for a short span of time while searching for a new job or switching between jobs. Frictional Unemployment also called Search Unemployment, is the time lag between the jobs. Frictional unemployment is considered as voluntary unemployment because the reason for unemployment is not a shortage of jobs, but in fact, the workers themselves quit their jobs in search of better opportunities.

CAUSES OF UNEMPLOYMENT

· Large population.

· Lack of vocational skills or low educational levels of the working population.

· Labour-intensive sectors suffering from the slowdown in private investment particularly after demonetisation

· The low productivity in the agriculture sector plus the lack of alternative opportunities for agricultural workers that makes transition among the three sectors difficult.

IMPACT  OF UNEMPLOYMENT

· The problem of unemployment gives rise to the problem of poverty.

· The government suffers extra borrowing burden because unemployment causes a decrease in the production and less consumption of goods and services by the people.

· Unemployed persons can easily be enticed by antisocial elements. This makes them lose faith in the democratic values of the country.

· People unemployed for a long time may indulge in illegal and wrong activities for earning money which increases crime in the country.

· Unemployment affects the economy of the country as the workforce that could have been gainfully employed to generate resources actually gets dependent on the remaining working population, thus escalating socio-economic costs for the state. For instance, a 1 % increase in unemployment reduces the GDP by 2 %.

· It is often seen that unemployed people end up getting addicted to drugs and alcohol or attempts suicide, leading to losses to the human resources of the country.

 

Frequently asked questions-FAQs

What is unemployment?
Unemployment means a situation where people who are willing and able to work cannot find a suitable job.

What is disguised unemployment?
When extra people are employed but their contribution is not needed. If they are removed, production remains the same.

What is the difference between frictional and structural unemployment?

l Frictional: Short-term, happens when people switch jobs.

l Structural: Long-term, happens due to mismatch between skills and available jobs.

What measures can reduce unemployment?

l Skill development programs

l Promotion of industries and services

l Encouraging self-employment

l Government job creation schemes

 

How does disguised unemployment affect productivity?

It lowers productivity, because more people are engaged in work than required, so efficiency decreases.

        References

Samuelson, P.A. & Nordhaus, W.D. – Economics (Standard economics textbook with types of unemployment).

Mankiw, N. Gregory – Principles of Economics (Clear explanation of frictional, structural, cyclical unemployment).

Sundaram & Vaish – Principles of Economics (Useful for Indian examples of unemployment).

NCERT Economics Textbooks  – Covers unemployment in India, types, and causes.

 

GLOSSARY

Disguised Unemployment

When more people work in a job than actually needed.

Example: In farming, five people work on land where only three are required.

Structural Unemployment

Unemployment that happens when skills don’t match available jobs.

Example: A typewriter mechanic cannot easily find work in the computer age.

 Seasonal Unemployment

Unemployment that happens at certain times of the year.

Example: Farmers or ice-cream sellers may not have work all year round.

 Technological Unemployment

Unemployment caused by machines or technology replacing human workers.

Example: Factory workers lose jobs because robots are used.

 Cyclical Unemployment

Unemployment that happens during economic downturns (recession).

Example: People lose jobs when businesses close due to low demand.

Frictional Unemployment

Temporary unemployment when people are changing jobs or looking for new ones.

Example: A teacher leaves one school and takes time before joining another.

  

 

 

 

Links

https://www.investopedia.com/terms/u/unemployment.asp

https://www.rba.gov.au/education/resources/explainers/unemployment-its-measurement-and-types.html

 https://corporatefinanceinstitute.com/resources/economics/un

 

Assignment :

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Contact 

Dr.M.Petchiammal

Assistant Professor

Department of Economics

Sadakathullah Appa College

Rahmath Nagar ,Tirunelveli

Emailto :apetchiammal88@gmail.com