Labour employment unemployment
| Philosophy of Social Sciences |
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Additional References
How the topic is discussed in NCERT Books
Useful websites
The report on the Employment and Unemployment Survey 2011-12 by the Ministry of Labour can be accessed here. NSSO reports can be found here. More information on NSSO's methodology is available here.
Employment in Wikipedia
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Teaching Outlines
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Key Idea Unemployment: Measurement and Types
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Learning objectives
To understand the NSSO measurements of labour To understand about various types of unemployment
Notes for teachers
Measurement of Unemployment
The National Sample Survey Organization (NSSO) carries out the task of measurement of employment and unemployment in India. It provides three different estimates of employment based on different reference periods to classify an individual's activity status. These are:
Usual status approach: has a reference period of 365 days preceding the date of the survey Current weekly status approach: has a reference period of 7 days preceding the date of the survey Current daily status approach: has a reference period of each of the 7 days preceding the date of the survey
Before determining whether an individual is unemployed, it has to be first ascertained if he or she belongs to the labour force or not. This depends on the individual's activity status for the reference period in question. The three types of statuses are: a) Working or engaged in economic activity (employed) b) Seeking or available for work (unemployed) c) Neither seeking nor available for work
Indiviuals belonging to categories a) and b) are taken to belong to the labour force and individuals in category c) are not in the labour force. So, the labour force comprises individuals who are employed and who are seeking employment. The unemployment rate is the percent of labour force that is out of work:
Unemployment rate = (unemployed workers/total labour force)*100
Types of Unemployment
The classification explained is found in Samuelson and Nordhaus' Economics (18th edition).
Seasonal Unemployment: This arises in sectors which do not have employment opportunities through the whole year, but only in some months. For example, agriculture – there is more work in months of sowing, weeding, and harvesting but once this peak season finishes, most agricultural workers cannot find work and therefore remain unemployed.
Voluntary Unemployment: People who are unwilling to work for the prevailing wage rates or people who receive income from other sources (property), may not find the need to work and therefore remain unemployed.
Frictional Unemployment: This arises because workers are constantly moving between different regions or jobs or different stages of their life cycle. Examples are situations when students graduate from college or mothers return to the workforce after having children.
Cyclical Unemployment: This is the situation when there are more number of available workers than the available jobs, i.e. overall low demand for labour. Total spending, output and production falls, and therefore there is an increase in unemployment.
Disguised Unemployment: This is most prevalent in the agricultural sector. For example, if a family has 10 members and they all work on the field when in reality the work requires only 3-4 people, we call it a situation of disguised unemlpoyment. This may be because the other members cannot find work anywhere else. The additional workers create no change in output, hence even if they are removed from the work, it will not make a difference.
Structural Unemployment: This occurs because there is a mismatch between demand for and supply of workers. This can occur when the demand for one type of labour is rising and demand for another is falling, and therefore the supply does not adjust quickly. Structural imbalances occur because some sectors grow and others decline.
This website has more information on the types of unemployment.
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