This MCQ module is based on: Unemployment: Types, Causes, and Impact
Unemployment: Types, Causes, and Impact
Study Notes and Summary
Chapter Notes:
Definition of Unemployment: Unemployment exists when people who are willing to work at the going wages cannot find jobs.
Workforce Population: Includes people aged 15 to 59 years. Individuals outside this age group (e.g., children, elderly) or those unwilling to work outside their domestic domain for payment (e.g., homemakers) are not counted as unemployed.
Types of Unemployment in India:
Rural Areas: Primarily seasonal and disguised unemployment.
Seasonal Unemployment: Occurs when people cannot find jobs during certain months of the year, common in agriculture (e.g., non-busy seasons after sowing/harvesting).
Disguised Unemployment: People appear to be employed but are actually working less than their full potential. More people are engaged in a task than required, and removing the extra workers would not decrease productivity.
Urban Areas: Primarily educated unemployment.
Educated Unemployment: Many youth with matriculation, graduation, and postgraduate degrees are unable to find jobs. Unemployment among graduates and postgraduates has increased faster than among matriculates.
Paradoxical Manpower Situation: A surplus of manpower in certain categories (e.g., educated unemployed) coexists with a shortage of manpower in others (e.g., specific technical skills needed for economic growth).
Impact of Unemployment:
Wastage of Manpower Resource: People who could be an asset become a liability.
Hopelessness and Despair: Leads to emotional distress among the youth.
Economic Overload: Increases the dependence of the unemployed on the working population.
Adverse Effect on Quality of Life: Leads to a general decline in health status and increased school dropouts when families live at subsistence levels.
Detrimental to Economy: Indicates a depressed economy and wastes resources that could have been gainfully employed.
Challenges in Measuring Unemployment in India:
Statistically, the unemployment rate might appear low, but this often includes people with low income and productivity who are counted as “employed.”
Poor people cannot afford to be idle and engage in any activity for subsistence, regardless of earning potential.
Potential for Labour Absorption:
Secondary Sector: Small-scale manufacturing is highly labour-absorbing.
Tertiary Sector: New services like biotechnology and information technology are emerging as new avenues for employment.
Story of a Village (Illustrating Human Capital & Employment Creation):
A family sends a son to an agriculture college. He returns as an agro-engineer and designs an improved plough, increasing wheat yield.
This creates a new job and surplus production, leading to profit-sharing among families and inspiring further community meetings for development.
Practice MCQs
Assessment Worksheets
This assessment will be based on: Unemployment: Types, Causes, and Impact
Olympiad Focus & Application
- Real-Life Connections & General Knowledge:
- Discuss the global phenomenon of “jobless growth” and its implications for developing economies like India, even with increasing GDP.
- Connect the concept of disguised unemployment to real-world agricultural practices in developing countries and the challenges of accurately measuring unemployment.
- The “paradoxical manpower situation” highlights the skill gap in economies and the importance of vocational training and skill development programs (e.g., Skill India).
- Case-based Scenarios & Reasoning:
- Scenario: A government implements a policy to boost agricultural productivity through mechanization. Analyze the potential impact on seasonal and disguised unemployment in rural areas and suggest complementary policies to mitigate negative effects.
- Scenario: A large number of engineering graduates are unemployed in urban areas, while industries report a shortage of skilled technicians. Propose solutions to bridge this skill gap and address educated unemployment.
- Conceptual Application:
- Opportunity Cost of Unemployment: Explain unemployment as a wastage of manpower resources and an opportunity cost to the economy, as potential output and contributions are lost.
- Multiplier Effect: Discuss how the creation of a single new job (like the agro-engineer in the village story) can lead to a multiplier effect on local economic growth and further employment opportunities.
- Comparative & Analytical Points:
- Compare and contrast seasonal, disguised, and educated unemployment, identifying their distinct characteristics, causes, and prevalence in rural vs. urban settings.
- Analyze why traditional statistical measures might underestimate the true extent of unemployment or underemployment in economies with a large informal sector, particularly concerning low-income and low-productivity workers.
- Discuss the social and economic costs of unemployment, including its impact on individual well-being, family stability, and overall societal development.
