Unemployment in India: Types, Measurement and Causes

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A situation in which someone is capable of working physically and mentally, but does not get a job to work is known as unemployment.In other words, unemployment implies only involuntary joblessness, where a person who is ready to work for the current wage rate does not obtain a position.

Unemployment in India: Types, Measurement and Causes!

Types of Unemployment in India

Open Unemployment

The term “unemployment” has a number of meanings, but it’s generally used to describe people who are out of work and looking for jobs. Open unemployment is an instance where a significant proportion of the labor force does not secure any employment with regular pay. The number of unemployed persons may be determined and measured. Because the economy grew faster than the growth rate in the workforce, some individuals were unable to find employment.

Disguised Unemployment

It refers to a situation in which more people are working than is necessary. Even if some of them go inactive, production does not suffer. In other words, it’s a case of employment with too many people where some have zero marginal productivity.

Because of their low-grade quality, foreign chemicals are now being phased out. This will not have an impact on the overall volume of production. In India, overcrowding in agriculture owing to rapid population growth and a scarcity of alternative employment possibilities may be considered as the primary cause of disguised unemployment.

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Seasonal Unemployment

Seasonal unemployment is one of the most common types of unemployment. Production activities occur only during certain times of the year in certain sectors and occupations such as agriculture, holiday resorts, ice factories, and so on. As a result, they provide employment for just a certain length of time each year. People working in these businesses may find themselves out of work throughout the off-season.

Cyclical Unemployment

Trade cycles at predetermined intervals are the source. Trade cycles are typical in capitalist economies. Business activity levels drop, triggering unemployment. Cyclical unemployment is a one-time occurrence that stems from economic downturns.

Educated Unemployment

Apart from open unemployment, many educated persons are underemployed since their education does not fit the requirements of current employment. The country’s education system, mass production, preference for white-collar professions, lack of employable skills, and declining formal salaried jobs are primarily to blame for youth unemployment in India. Open or underemployment may be considered educated unemployment.

Technological Unemployment

It is the consequence of ongoing modifications in manufacturing processes that, while not requiring much labor, do result in efficiency gains. Modern technology being capital intensive necessitates fewer workers and contributes to this sort of unemployment.

Structural Unemployment

Structural unemployment is caused by dramatic modifications in a country’s economic structure. These changes may have an impact on either the supply or demand for a factor of production. Structural employment is an inevitable consequence of rapid economic growth and technological progress, as well as invention and innovation that are occurring all over the world in every field.


It’s when individuals who are unemployed perform less than their capacity to produce. People in this sort of unemployment are not employed in a productive way. They may be employed on a part-time basis or take up a position that needs only a secondary education. A postgraduate, for example, might work as a clerk, requiring only an S.S.L.C degree.

Casual Unemployment

Due to short-term contracts, a lack of raw materials, a fall in demand, or even a shift in ownership, casual unemployment may occur when someone is employed on a daily basis.

Chronic Unemployment

Chronic unemployment occurs when an economy’s unemployed people stay without work for lengthy periods of time. Chronic unemployment is caused by a vicious cycle of poverty, as well as rapid population growth and a lack of economic development.

Frictional Unemployment

Frictional unemployment is caused by a mismatch between the amount of labour available and the demand for labor. This type of unemployment is brought about by job stability, a lack of up-to-date information, and the fact that employment is seasonal.

Measurement of Unemployment

There are three types of unemployment metrics. The National Sample Survey Organisation (NSSO) uses them to calculate the following three figures:

Usual Status Unemployment

Chronic unemployment is a term given to individuals who are unemployed for an extended period of time without finding work. This figure counts the number of people who were out of work for a major portion of the year. Unemployment estimates are lowered as a result of this measure.

The Permanence of Employment (Perm) Index is a measure of how many people are employed. It determines the standard activity status of a person who is either employed or unemployed or out of the workforce. Those in both their main and supplementary sectors may be classified as working or accessible for work.

Weekly Status Unemployment

The unemployment estimate is based on an assumption that a person will work for at least one week. A person who is unemployed is someone who isn’t able to work for even one hour during the survey period. In other words, according to this assumption, a person is considered employed for the week even if he or she works only for a day during the week.

Current Daily Status Unemployment

For each day of the previous seven days, the algorithm calculates a person’s activity status. A day is used as the reference period here. If a person was unable to find employment on a particular day or several days during the survey week, he or she is considered unemployed.

Most of the time, a person who works for four hours or more at a stretch is considered employed for the whole day. The status of being unemployed is known as daily status unemployment.

Causes of Unemployment in India

Here are the most significant reasons for unemployment in India:

  • The country’s population is growing at a fast pace, and the labor force is increasing as well.
  • Underdevelopment of the economy.
  • Slow growth in the agricultural sector.
  • Defective system of education.
  • Absence of manpower planning.
  • Degeneration of village industries.
  • Inappropriate technology.
  • Slow growth of industrial sector.
  • Immobility of labour.
  • Jobless growth.
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