Explain Disguised Unemployment With an Example

By Esha Dhawan|Updated : August 24th, 2022

Disguised Unemployment is a situation where workers are employed but left without work for an extended period. Hence, their potential is not utilised, and their work doesn’t necessarily affect the output. So, a person who is not working but considers himself employed can fall under disguised unemployment. This situation can create a feeling of dissatisfaction as workers are underutilised.


Disguised unemployment is a situation where workers are employed but have no work 

Let’s consider the example of agriculture. This situation is quite prevalent in rural areas as agriculture is the primary source of income. If a crop requires only 3 people and 5 or 6 people are working on it, then the remaining people are in a state of disguised unemployment. Also, since agriculture is a seasonal profession, farmers might sit idle for a few months every year where their potential is not utilised.

Another example can be when professionals like plumbers, electricians and painters can’t find work on a daily basis and work less than their usual potential.


Explain Disguised Unemployment With an Example

Disguised unemployment is when workers have no or less work but are technically employed. Simply put, it is a state where people work way less than their potential but can be tagged as employed.


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