1.

Describe the types of unemployment.

Answer»

The following are the types of unemployment. 

Types of unemployment:

1. Cyclical Unemployment 

2. Frictional Unemployment 

3. Technical Unemployment 

4. Disguised Unemployment 

5. Seasonal Unemployment 

6. Educated Unemployment 

7. Structural Unemployment

1. Cyclical Unemployment:

  • This unemployment exists during the downturn phase of trade cycle in the economy.
  • In a business cycle during the period of recession and depression, income and output fall leading to widespread unemployment
  • It is caused by deficiency of effective demand.
  • Cyclical unemployment can be cured by public investment or expansionary monetary policy.

2. Seasonal Unemployment:

  • This type of unemployment occurs during certain seasons of the year.
  • In agriculture and agro based industries like sugar, production activities are carried out only in some seasons.
  • These industries offer employment only during that season in a year. Therefore people may remain unemployed during the off season.
  • Seasonal unemployment happens from demand side also; for example ice cream industry, holiday resorts etc.

3. Frictional Unemployment (Temporary Unemployment):

  • Frictional unemployment arises due to imbalance between supply of labour and demand for labour.
  • This is because of immobility of labour, lack of necessary skills, break down of machinery.
  • shortage of raw materials etc.
  • The persons who lose jobs and in search of jobs are also included under frictional unemployment.

4. Educated Unemployment:

  • Sometimes educated people are underemployed or unemployed when qualification does not match the job.
  • Faulty education system, lack of employable skills, mass student turnout and preference for white collar jobs are highly responsible for educated unemployment in India..

5. Technical Unemployment:

  • Modem technology being capital intensive requires less labourers and contributes to technological unemployment.
  • Now a days, invention and innovations lead to the adoption of new techniques there by the existing workers are retrenched.
  • Labour saving devices are responsible for technological unemployment.

6. Structural Unemployment:

  • Structural unemployment is due to drastic change in the structure of the society.
  • Lack of demand for the product or shift in demand to other products cause this type of unemployment.
  • For example rise in demand for mobile phones has adversely affected the demand for cameras, tape recorders etc.
  • So this kind of unemployment results from massive and deep rooted changes in economic structure.

7. Disguised Unemployment:

  • Disguised unemployment occurs when more people are than what is actually required.
  • Even if some workers are withdrawn, production does not suffer.
  • This type of unemployment is found in agriculture.
  • A person is said to be disguisedly by unemployed if his contribution to output is less than what he can produce by working for normal hours per day.
  • In this situation, marginal productivity of labour is zero or less or negative.


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