Three Types of Unemployment

Unemployment is a common economic malady faced by each and every country of the world, irrespective of their economic system and the level of development achieved. But the nature of unemployment prevailing in underdeveloped or developing countries sharply differs to that of developed countries of the world. 

  While the developed countries are facing unemployment, mostly of Keynesian involuntary and frictional types but the underdeveloped or developing countries like India are facing structural unemployment arising from high rate of growth of population and slow economic growth. 

 Unemployment is a serious problem. It indicates a situation where the total number of job vacancies is much less than the total number of job seekers in the country. It is a kind of situation where the unemployed persons do not find any meaningful or gainful job in-spite of having willingness and capacity to work. Thus unemployment leads to a huge wastage of manpower resources. 

 India is one of those ill-fated underdeveloped countries which are suffering from a huge unemployment problem. But the unemployment problem in India is not the result of deficiency of effective demand in Keynesian term but a product of shortage of capital equipment’s and other complementary resources accompanied by high rate of growth of population.  In terms of Indian Unemployment, the three types of unemployment are given beow:

1. Disguised Unemployment: A situation in which more persons are employed in a job than the number of persons is optimally required to complete the job.  If a part of the labour force is withdrawn from the job, total production remains unchanged. This withdrawn labour will be known as disguised unemployed labour. The Indian agriculture is characterised by the existence of considerable amount of surplus labour. There are nearly 12 crores marginal farmers who posses less than two hectare of agricultural land.  The whole family, at least four persons, is engaged in the farming which is excess labour on the land. 

2. Seasonal Unemployment: When, there is employment for a certain period of time and rest of the time, there is no job, then it is said that there exists easonal unemployment. Seasonal unemployment in agriculture is a normal condition in India. In seasonal unemployment, a person remains jobless for certain period of time, i.e. as in summer season.   The demand for agricultural labour increases at the time of sowing and harvesting. During the interval between sowing and harvesting, there is a fall in employment. Seasonal unemployment exists not only in agriculture sector but also it exists in industries too.  For example, in a ice factory, a worker remains jobless in winter season when demand of ice falls.  Similarly, woolen textile, umbrella industries are also witnessed seasonal unemployment.   

3. Structural Unemployment: In India, there is huge growth of educated population, nearly 80 lakhs students each year, are passout from higher educational institutes or technical educational institutes and they start seeking jobs. The growth of Indian economy is about 7.2% per annum which is not sufficient to absorb the huge job seekers. The unemployment generated here is called structural unemployment. It is the result of the backwardness and low rate of economic development of a country. Technological advancements are shifting industrial activities are also generated structural unemployment.  For example, there is decrease in coal base activities and coal is being replaced by renewable electric energy in the country. It is resulting surplus labour in coal industry and unemployment generated for this surplus labour is called structural unemployment.