Unemployment: Meaning, Types & Measurement

Meaning: Unemployment

It is a situation in which people are ready and willing to work at the existing rate of wages but still, they cannot get work.
Measurement of unemployment and employment are done by National Sample Survey Organization (NSSO) in India.
NSSO divides people into the following three categories -
1. Working people (engaged in an economic activity)
2. Not working (looking for work)
3. Neither working nor looking for work
People in category (a) are called workforce.
People in category (b) are called unemployed.
People in categories (a) and (b) are called Labour force.
People in category (c) are called not in the Labour force.
Number of unemployed = Labour force – Workforce
Unemployment data in India are kept under the Ministry of Labour and Employment.

Types of Unemployment

S. No.	Type of Unemployment	Meaning
1	Structural Unemployment	Caused by structural change in economy. Example- technological change, growing population etc.
2	Frictional Unemployment	When people shift from one job to another and remain unemployed during this interval period.
3	Cyclical Unemployment (Demand Deficiency Unemployment)	When people are thrown out from the job due to a decrease in demand. Example- recession
4	Disguised Unemployment	In this type of employment, people are employed but their marginal productivity is zero. Example- One man is engaged in some agriculture work, his friend joins him but the productivity of both remains same. His friends come under disguised unemployment.
5	Educated Unemployment	If one educated person not able to get a suitable job suited to his qualification. Example- Engineering graduate is getting clerk post instead of engineer post.
6	Open Unemployment	A condition in which people do not find any work to do. It includes both skilled and non-skilled people.
7	Under Unemployment	When people obtain work but their efficiency and capability are not utilized at their optimum and they contribute to the production up-to a limited level.
8	Voluntary Unemployment	In this type of unemployment, jobs are available but individual wants to remain idle. Example- lazy people, people who have ancestor property do not want to earn.
9	Natural Unemployment	2 to 3 % unemployment considered natural and cannot be eliminated.
10	Chronic Unemployment	Caused due to the long-term unemployment present in the economy.
11	Seasonal Unemployment	In this type of unemployment, people are unemployed for a few months of the year. Example- Farmers

Unemployment in India is measured in a variety of ways.

The National Sample Survey Office (NSSO), which is part of the Ministry of Statistics and Programme Implementation (MoSPI), uses the following methods to calculate unemployment in India:

Usual Status Approach: It estimates only those persons as unemployed who had no gainful work for a major time during the last 365 days before the date of survey.
Weekly Status Approach: It records only those persons as unemployed who did not have gainful work even for an hour on any day of the week before the date of survey.
Daily Status Approach: In this approach, unemployment status of a person is estimated for each day in a reference week. A person having no gainful work even for 1 hour in a day is described as unemployed for that day.

Revision Notes: Unemployment- Meaning, Types & Measurement

Unemployment: Meaning, Types & Measurement

Meaning: Unemployment

Types of Unemployment

S. No.

Type of Unemployment

Meaning

Unemployment in India is measured in a variety of ways.

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