Meaning, Measurement and Different types of Unemployment in an Economy

Introduction

We all know that full employment is a rare phenomenon or situation in a country. whereas, unemployment is a general phenomenon which means it happens continuously. There are number of reasons for occurring  unemployment such as lack of human resource, capital formation, Rate of Development of infrastructural facilities, political status, etc. 

However, Unemployment is the major indicator to measure the rate of development in the country.

Friends, 

Practically speaking, A labour/employee  in any sector from agriculture to service sector experiences the various types of unemployment in different times and seasons. It will be understood shortly by reading following types of unemployment.

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Unemployment

It is a situation when a labor doesn’t get employment despite of his ability and willingness to work at 

the existing wage rate is called unemployment.

The number of employed in the labour force is divided by unemployed individuals is unemployment rate.

Types of unemployment

Let us move to main topic that is Types of unemployment.

 

Structural unemployment

 this type of unemployment is associated 

with economic structure of the country. when the demand for 

labors falls and supply of labors increases structural unemployment 

appears in the economy. Rate of capital growth limits the 

employment opportunities. It is long run in the nature. Indian 

unemployment is basically a structural unemployment.

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Not able to use resources and income inequalities are major reasons for this kind of unemployment. these restricts the formation of capital. hence it results in unemployment.

Under employment 

It refers to those laborers under employed who obtained

work but their efficiency and capability are not fully utilized.

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Generally a firm or country experiences this kind of unemployment by not recognizing the abilities and skills of an individual or a professional. not able to divide work according to their skills and knowledge is also a significant reason.

Disguised unemployment

If the marginal productivity of a laborer is 

zero then it is called as disguised unemployment. Even he is 

removed from the work the total production will not be effected. 

Under developed economies posses this  type of unemployment.

Open unemployment

When the laborer lives without any work or 

they don’t find work to do, they come under the category of open 

unemployment.

Educational unemployment 

It refers to persons who are educated, 

trained and skilled and fails to get job according to their 

qualification. This is the main problem in most underdeveloped and developing economies.

Frictional unemployment

It is the temporary unemployment which 

exists during the period in transfer of a labor from one occupation 

to another. It arises due to imperfection of labour.

Seasonal unemployment 

If laborers get employment only in some 

seasons it is called as seasonal unemployment. For example, farming 

in India provides employment for only 7 to 8 months. The remaining 

time all are unemployed.

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During that period of unemployment, they find another temporary work to earn income and living.

Cyclical unemployment

It is occurred due to a change in business 

activities in the economy. This type of unemployment is found in 

developed economies.

Technological unemployment

If the introduction of new technology 

takes place and cause displacement of workers is called as 

technological unemployment.

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Technology increases the rate of production in simple way but it causes a heavy replacement of employees.

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The end

Thanks for reading. Hope it is helpful to you.

Come and share your thoughts.

From,

WELL-BEING