Unemployment and it’s Types

TISSNET often ask questions on social issues and its causes.Unemployment is one them.Let’s see what actually unemployment and its various types and causes.

Unemployment

Unemployment occurs when a person who is actively searching for employment and ready to accept work at current wage rate and still unable to find work. It is used as a measure of the health of the economy. It has been a burning problem of modern societies, whether developed or undeveloped. It is measured in terms of unemployment rate = no. of unemployed/ total labour force

Types

Voluntary Unemployment

Frictional Unemployment:

  • Temporary phenomenon
  • Workers temporarily out of work while changing jobs Strikes and lockouts. It is due to difficulties in getting workers and vacancies together.

Casual Unemployment:

  • Where workers are employed on a day-to-day basis
  • Occurring due to short-term contracts, which are terminable any time.

Seasonal Unemployment:

  • Some industries and occupation in which production activities are seasonal in nature.
  • Agro-based industrial activities like sugar mills etc.
  • Offer employment only for a certain period of time in a year
  • Can find in any country, causes wastage of resources

Structural Unemployment:

  • Due to structural changes in the economy, it taken place
  • Decline in demand for production lead to reduction in its manpower requirements
  • E.g. improvement of transportation in Towns, tongas become out dated and tonga operators become unemployed, therefore, they need to search jobs in any other industry.

Technological Unemployment:

  • It arise as a result of technological improvement
  • Due to improvement in machinery, production methods, some workers are replaced by Machines e.g. due to the arrival of computers, typewriters lost their jobs.

Cyclical Unemployment:

  • Trade cycles, recessionary and depressionary phases
  • Deflationary period, demands decline, production decreased and need to reduced workers
  • Unemployment caused by insufficiency of effective demand
  • Short term phenomenon
  • Increasing total expenditure and pushing up the level of effective demand, can reduced this kind of unemployment

Chronic Unemployment:

  • Unemployment tends to be a long-term feature of a country it is called chronic unemployment.
  • Underdeveloped country Vicious circle of poverty High population growth Backward or primitive technology
  • Low capital formation, are causes for this

Disguised Unemployment:

  • Situation of employment with surplus manpower, some workers have zero marginal productivity, removal of them will not affect the volume of total output
  • Suppose, for one work four man work effectively, if there are six people involved with that work they are not contributing anything in additional production their marginal productivity is zero

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