Unemployment refers to a situation where the persons who are able to work and willing to work at the prevailing wage rate fail to secure jobs.

Types of Unemployment

Voluntary Unemployment

People who are not willing to work at the prevailing wage rate. These people may have income from their assets. Thus, they need not work at all.

Frictional Unemployment

A temporary phenomenon which arises when workers are temporarily out of work while changing jobs or are suspended due to strikes or lockouts.

Casual Unemployment

In industries/services such as construction, catering etc., also in agriculture, where workers are employed on a day-to-day basis, there are chances of casual unemployment occurring due to short-term contracts which are terminable anytime.

Seasonal Unemployment

Industries or occupations such as agriculture, catering, holiday resorts, where production activities are seasonal in nature offer employment only for a certain period of time in a year. People engaged in such type of work may remain unemployed during the o-season, which is known as seasonal unemployment.

Structural Unemployment

Unemployment which arises due to change in the pattern of demand leading to changes in the structure of production in the economy is termed as the structural unemployment.

Technological Unemployment

Due to introduction of new machinery, improvements in methods of production, labour-saving devices, etc., some workers tend to be replaced by machines. is unemployment is known as technological unemployment. For example, use of synthetic rubber is bound to reduce demand for natural rubber leading to unemployment in rubber plantation.

Cyclical Unemployment

Associated with cyclical fluctuations of economic activity due to trade cycle; Mostly found in the capitalist countries like USA, etc.

Chronic Unemployment

When unemployment tends to a long time feature of a country, it is called chronic unemployment. Underdeveloped countries suffer from chronic unemployment on account of the vicious cycle of poverty, resource scarcity, high population growth, low capital formation, etc.

Disguised Unemployment

Refers to a situation where people may be working and apparently employed, yet their contribution to output may be zero or negative. Found mainly in agriculture, public sector enterprises, etc.

Employment and Unemployment Measurements in India

National Sample Survey Organisation (NSSO) has been conducting quinquennial surveys on a regular basis since 1972-73 to generate national level data on employment and unemployment in India. The NSSO has, over time, developed and standardised measures of employment and unemployment. The NSSO collects data on employment and unemployment using three broad measures or approaches: 1. Usual Status; 2. Current weekly Status; and 3. Current Daily Status. The Usual Status is further categorised at two levels: 1. Usual Principal Status; and 2. Usual Principal and Subsidiary Status.

Usual Status

Relates to the activity status of a person during the reference period of last 365 days preceding the date of survey. The activity status on which a person spent relatively longer time (major time criterion) is considered the Usual Principal Status (UPS). To decide the usual principal activity status of a person, a two-stage classification is used to determine the broad activity status, viz., employed, unemployed and out of labour force within which, the detailed activity status is determined depending on the relatively longer time spent in the activities. Besides the usual principal activity status, a person could have pursued some economic activity for a smaller period, not less than 30 days. The status in which such economic activity is pursued is the subsidiary economic activity status of that person. If these two are taken together, the measure of Usual Principal and Subsidiary Status (UPSS), i.e. usual status is obtained.

Current Weekly Status (CWS)

Of a person is the activity status obtained for a person during a reference period of 7 days preceding the date of survey. According to this, a person is considered as a worker if he/she has performed any economic activity at least for one hour on any day of the reference week, and is obtained on the basis of daily activities performed on each day of the reference period.

Current Daily Status (CDS)

Of a person is determined on the basis of his/her activity status on each day of the reference week using a priority-cum-major time criterion (day-to-day labour time disposition). Broadly, a person is considered working (employed) for the full day if he/ she worked for 4 hours or more during the day.

Worker Participation Ratio (WPR) for different segments of the population considering all ages Employment and Unemployment Indicators

Labour force participation rate (LFPR): LFPR is deed as the number of persons/ person-days in the labour force per 1000 persons/person-days.

LFPR = No.of employed persons+ No.of unemployed persons / 1000

Labour force participation rate (LFPR) for all persons

According to the usual status, 40 per cent of population belonged to the labour force: 41 per cent in rural and 36 per cent in urban areas. LFPR was significantly lower for females than for males in both rural and urban areas. It was about 56 per cent for each of rural male and urban male. For females, LFPR was 27 per cent in rural areas and 15 per cent in urban areas. LFPR for persons of age 15-59 years

For the age group 15-59 years, LFPR at the all-India level was nearly 60 per cent in usual status (ps+ss): 85 per cent for rural male, 40 per cent for rural female, 81 per cent for urban male and 21 per cent for urban female.

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