What is Unemployment?
Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequent measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labor force.
National Sample Survey Organization (NSSO) defines employment and unemployment on the following activity statuses of an individual:
- Working (engaged in an economic activity) i.e. ‘Employed’.
- Seeking or available for work i.e. ‘Unemployed’.
- Neither seeking nor available for work.
The first two constitutes labour force and unemployment rate is the percent of the labour force that is without work.
Unemployment rate = (Unemployed Workers / Total labour force) × 100
Types of Unemployment in India
- Disguised Unemployment:
- It is a phenomenon wherein more people are employed than actually needed.
- It is primarily traced in the agricultural and the unorganised sectors of India.
- Seasonal Unemployment:
- It is an unemployment that occurs during certain seasons of the year.
- Agricultural labourers in India rarely have work throughout the year.
- Structural Unemployment:
- It is a category of unemployment arising from the mismatch between the jobs available in the market and the skills of the available workers in the market.
- Many people in India do not get job due to lack of requisite skills and due to poor education level, it becomes difficult to train them.
- Cyclical Unemployment:
- It is result of the business cycle, where unemployment rises during recessions and declines with economic growth.
- Cyclical unemployment figures in India are negligible. It is a phenomenon that is mostly found in capitalist economies.
- Technological Unemployment:
- It is loss of jobs due to changes in technology.
- In 2016, World Bank data predicted that the proportion of jobs threatened by automation in India is 69% year-on-year.
- Frictional Unemployment:
- The Frictional Unemployment also called as Search Unemployment, refers to the time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
- In other words, an employee requires time for searching a new job or shifting from the existing to a new job, this inevitable time delay causes the frictional unemployment. It is often considered as a voluntary unemployment because it is not caused due to the shortage of job, but in fact, the workers themselves quit their jobs in search of better opportunities.
- Vulnerable Employment:
- This means, people working informally, without proper job contracts and thus sans any legal protection. These persons are deemed ‘unemployed’ since records of their work are never maintained.
- It is one of the main types of unemployment in India.
Causes of Unemployment
- Large population.
- Low or no educational levels and vocational skills of working population.
- Inadequate state support, legal complexities and low infrastructural, financial and market linkages to small/ cottage industries or small businesses, making such enterprises unviable with cost and compliance overruns.
- Huge workforce associated with informal sector due to lack of required education/ skills, which is not captured in any employment data. For ex: domestic helpers, construction workers etc.
- The syllabus taught in schools and colleges, being not as per the current requirements of the industries. This is the main cause of structural unemployment.
- Inadequate growth of infrastructure andlow investments in manufacturing sector, hence restricting employment potential of secondary sector.
- Low productivity in agriculture sector combined with lack of alternative opportunities for agricultural worker which makes transition from primary to secondary and tertiary sectors difficult.
- Regressive social norms that deter women from taking/continuing employment.