Different types of Unemployment in India

By Stuti Mishra|Updated : January 21st, 2021

Unemployment is a situation in which people are ready and willing to work at the existing rate of wages but still, they cannot get/find work. Here is all about unemployment.

What is Unemployment?

Unemployment is a situation in which people are ready and willing to work at the existing rate of wages but still, they cannot get/find work. It is often used as a measure for the health of the economy. The most oftenly used measure of unemployment is the unemployment rate, which is the number of unemployed people divided by the number of people in the labor force.

Types of Unemployment

1. Structural Unemployment

  • It is a category of unemployment arising from the mismatch between  jobs available in the market with the skills of the available workers in the market.

  • It is also considered as the unemployment created due to technological changes.
  • 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.

2. Frictional Unemployment

  • When people shift from one job to another and remain unemployed during this interval period.
  • It is also known as short-duration unemployment.

3. Cyclical Unemployment (Demand Deficiency Unemployment)

  • Cyclical Unemployment is result of the business cycle, where unemployment rises during recessions and declines with economic growth and lower demand
  • Its figures in India are negligible.
  • It is a phenomenon that is mostly found in capitalist economies.

4. Disguised Unemployment

  • In this type of employment, people are employed but their marginal productivity is zero.
  • This employment employ more people than required.
  • 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. Open Unemployment

  • A condition in which people do not find any work to do.
  • It includes both skilled and non-skilled people.

6. 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.

7. 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.

8. Natural Unemployment

  • 2 to 3 % unemployment considered natural and cannot be eliminated.

9. Chronic Unemployment

  • Caused due to the long-term unemployment present in the economy.

10. Seasonal Unemployment

  • In this type of unemployment, people are unemployed for few months of the year.
  • Example- Farmers

Quick Facts 

  • Measurement of unemployment and employment are calculated by NSSO (National Sample Survey Organization) in India.
  • NSSO divide people into the following three categories:
    • Working people (engaged in an economic activity)
    • Not working (looking for work)
    • Neither working nor looking for workPeople in category (a) are called
    • 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


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