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What is Unemployment ?

A person who is :-
 Physically Fit
 Mentally sound
 Well qualified
 Willing to work at prevailing wage rate


• Unemployment can be both voluntary and involuntary.
• Voluntary unemployment refers to the condition in which
people are unemployed by their choice.
• They may not work due to laziness or otherwise, they are
not interested in any gainful job.
• Involuntary unemployment refers to a situation when
people are desiring to work at the prevailing wage rate but
they are unable to find the work
Nature of Unemployment

Rural Urban


Disguised Educated
Under-unemployment Industrial


Rural unemployment:
As it is very much clear from the name, the
unemployment prevailing in the rural area is
called rural unemployment. It is primarily a
phenomenon of the agricultural sector

Rural unemployment further be divided into

following categories:
• Seasonal unemployment refers
to a situation where a number of
persons are not able to find jobs
during some months of the year.

• Seasonal employment also prevailed in some industries like

sugar mills, tea industry etc.

EXAMPLE-: Agriculture is a seasonal activity.

There is an increased demand for labor at the time of sowing, harvesting,
weeding and threshing. In between there is little or no demand for labor.
Agricultural labor finds himself unemployed during this period.
This is called seasonal unemployment.
• When more people are engaged
in some activity than the number
of person required for that, this is called
disguised unemployment

EXAMPLE: An agricultural field require 3 laborers but people engaged in

this activity is 6 then this unemployment for 3 labors is called disguised
unemployment .
•Disguised unemployment is
very serious problem in Rural
Under -Employment

Under employment has two implications .

• Firstly ,it means the person gets employment for a few
months and remains unemployed for some months.
• Secondly it means person works at a job that is below his
caliber and qualification.
Urban Unemployment

• Urban unemployment is that unemployment

which exit in urban areas.
• It is primarily a phenomenon of the industry
and service sector
This is temporary type of unemployment.
Frictional Unemployment is when a
person does not have a job due the
process of moving from one job to
Furthermore, it could also be the time period which the worker is
searching for job.
For example
1.University graduates who are searching for a job after graduating from
2. Actors who are searching for role in a movie

• This unemployment is because of technological

changes or change in the demand pattern goods.
• Structural unemployment is long-term unemployment
resulting from a lack of workers skills or a mismatch
between worker skill and job requirements.
Heavy Manufacture (mining) - Manufacture now involves
machines so humans are no longer needed for the harder work.
Cyclical Unemployment

It is a situation ,which arises during the trade cycle.

Trade cycle consist of boom and recession.
In boom period the economic condition of the country is very
good. whereas in recession the economic condition of the
country is not good.
For example:
During the recession of 2008-2009,many workers were laid
off as business activity declined.
Educated Unemployment

• It refers to the situation when educated people do not

get a job according to their educational qualification.
• In India, It is very common problem
• Other reason for educated unemployment is that, an
illiterate is ready to take any job but educated person
finds satisfaction in doing only reputed job.
1. Loss of Human Resources:
The problem of unemployment causes loss of human
resources. labourers waste their maximum time in search of
2. Increase in Poverty:
Unemployment deprives a man of all sources of income. As a
result he grows poor. Therefore, unemployment generates
3. Social Problems:
Unemployment breeds many social problems comprising of
dishonesty, gambling, bribery, theft etc. As a result of
unemployment social security is jeopardized.
• Political Instability:
• Unemployment gives birth to political instability in country.
Unemployed persons can easily be enticed by antisocial elements.
They lose all faith in democratic values and peaceful means. They
consider that Government is worthless which fails to provide them
• 5. Exploitation of Labour:
• In the state of unemployment, labourers are exploited to the
maximum possible extent. Those labourers who get work have to
work under adverse condition of low wages.
• All this tells upon the efficiency of labourers greatly influence the
pattern of employment opportunities in the country. Being poor, a
person does not make any gainful use of existing resources.
Steps taken by government
to increase employment
• Swaranjayanti Gram Swarozgar yojana(SGSY) It is the single self
employment programme for the rural poor. It was launched in Apirl,
1999.It aims at establishing a large number of small enterprises in the
rural areas. The expenditure on SGSY is shared by the central and
state government in the ratio of 75:25. For north- eastern states this
ratio is 90:10.The SGSY is implemented by District Rural
Development Authority through the Panchayat Samitis.The SGSY has
now been restructured as National Rural Livelihood Mission
• Sampoorna grameen rozgar yojana(sgry) It
was launched on the 1st september, 2001.
The main objectives of this yojana are to
provide opportunity of employment to
surplus labour , to provide food security,
development of the basic infrastucture.This
yojana has set a target of creating 100
crore man days of employment. In this
yojana part of wages are paid in terms of
• Micro, small and medium enterprises With a
view to reducing unemployment, government
has made special efforts to develop micro,
small and medium enterprises. In 2009-10, as
many as 695 lakh persons were employed in
these industries. Special incentives are given to
these enterprises in 11th five year plan.
• Development of organised sector Many people
are getting employed in organised public and
private sectors, such as, industries, mining,
transport, construction activities etc.In the year
2008-09, it provided employment to 2 crore and
81 lakh persons
• employment in foreign countries Government also helps
people to get employment aboard. Special agencies have
been set up to recruit people to serve in foreign countries
like Kuwait, Saudi Arabia, Iran, Canada, Australia, etc.
November 2004, Government has started National food
for work programme in 150 most back ward districts of
the country. In this programme wages are distributed in
the form of foodgrains. This scheme is aimed at rural
• Swaranjayanti shahari rozgar yojana This yojana provides
employment to urban unemployed. It came into operation from
1st december, 1997. it comprises of two special schemes;
Urban self employment programme(USEP) Urban wage
employment programme(UWEP) In urban self employment
programme the person starts his own work/business and earns
profit while in urban wage employment programme the person
takes employment as employee with some other person and get
wage/ salary for his work.
• Mahatma gandhi national rural employment
guarantee act(mgnrega) Government enacted
MGNREGA in 2005 and in year 2006-07, this
act has been implemented in 200 districts of the
nation. It provides atleast 100 days of
guaranteed wage employment in every financial
year to the poor persons living in rural areas to
atleast one adult person in every house
hold.Now, this act has been extented to all 640
• Employment in eleventh five year plan
Creating 58 million new employment
oportunities Reducing unemployment rate
to below 5 per cent Creating quality jobs in
organised sectors Creating non
agriculture work oportunities by creating
jobs in industrial and service sectors
Special programmes aimed at target groups
such as weavers, artisans, craftmens etc.
• (i) Caste System:
• In India caste system is prevalent. The work is prohibited for specific
castes in some areas.
• In many cases, the work is not given to the deserving candidates but
given to the person belonging to a particular community. So this gives
rise to unemployment.
• Slow Economic Growth:
• Indian economy is underdeveloped and role of economic growth is
very slow. This slow growth fails to provide enough unemployment
opportunities to the increasing population
• (iii) Increase in Population:
• Constant increase in population has been a big problem in India. It is one of the
main causes of unemployment. The rate of unemployment is 11.1% in 10th Plan.
• (iv) Agriculture is a Seasonal Occupation:
• Agriculture is underdeveloped in India. It provides seasonal employment. Large part
of population is dependent on agriculture. But agriculture being seasonal provides
work for a few months. So this gives rise to unemployment.
• (v) Joint Family System:
• In big families having big business, many such persons will be available who do not
do any work and depend on the joint income of the family. Many of them seem to
be working but they do not add anything to production. So they encourage
disguised unemployment.
• (vi) Fall of Cottage and Small industries:
• The industrial development had adverse effect on cottage and small industries. The
production of cottage industries began to fall and many artisans became
• (vii) Slow Growth of Industrialisation:
• The rate of industrial growth is slow. Though emphasis is laid on industrialisation
yet the avenues of employment created by industrialisation are very few.
• (viii) Less Savings and Investment:
• There is inadequate capital in India. Above all, this capital has been judiciously
invested. Investment depends on savings. Savings are inadequate. Due to shortage of
savings and investment, opportunities of employment have not been created.
• (ix) Causes of Under Employment:
• Inadequate availability of means of production is the main cause of under
employment. People do not get employment for the whole year due to shortage of
electricity, coal and raw materials.
• (x) Defective Planning:
• Defective planning is the one of the cause of unemployment. There is wide gap
between supply and demand for labour. No Plan had formulated any long term
scheme for removal of unemployment.
• (xi) Expansion of Universities:
• The number of universities has increased manifold. There are 385 universities. As a
result of this educated unemployment or white collar unemployment has increased.
Thank You