Unemployment

 #Importance: GS III - Indian Economy

✓ In common parlance anybody who is not gainfully employed in any productive activity is called unemployed. However, it can be of two kinds

A. Voluntary unemployed

B. Involuntary unemployed. 

Here we are concerned with the second category of unemployed persons. 

✓ Hence, unemployment can be defined as a situation when persons able and willing to work are seeking jobs at the prevailing wage level but they are unable to get the same.

✓Unemployment in developing economies like India is not the result of deficiency of effectivedemand in the Keynesian sense, but aconsequence of shortage of capital equipment or other complementary resources

✓ In India unemployment is structural in nature due to lack of productive capacity and resources.

Types of Unemployment 

1. Cyclical unemployment: It is the result of depression in an economy.

2. Frictional unemployment: This kind of unemploymentis temporary It is the result of a situation when new industries drive out old ones and workers change over to better jobs

3. Open unemployment: It refers to those who have no work to do even though they are able and willing to do work.

4. Seasonal unemployment: This occurs at certain period of the work when work load is comparatively less, and hence people are rendered jobless. For example, in the period between past harvest and next sowing, agricultural labourers are unemployed. 

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

6. Under-employment (Disguised unemployment): It results when a person contributes to production less than what he or she is capable of, for example, an engineer working as a clerk is under employed. 

7. Compulsory unemployment: It means the labour power which is ready to work on the current rate but does not get the work.

8. Seasonal unemployment: It means the unemployment of the farmers and farm labourers during non-crop seasons.

• The main reasons for unemployment in India are

A. Slow economic development

B. Population explosion

C. Outdated technique

D. Improper education system

E. Limited effect of government planning.