Unemployment: Definition, Types, Measurement and India | For UPSC, BPSC and other Civil Servicces Examinations

Tuesday, September 15, 2020

When a person is willing to work but he does not get a suitable work due to any reason such as non-availability of work, lack of skill, etc. is called as unemployed and such a situation in the economy is termed as unemployment.

Types of Unemployment

Unemployment is broadly classified into three types:-

1. Structural Unemployment 

This kind of unemployment in economy is caused due to structural changes in the economy. For example structural employment occurs when a factory replaces AI based automated machines. In such a situation the number of workers required in such a factory reduces significantly.

2. Frictional Unemployment

This can be also called as temporary unemployment. It is caused due to temporary changes such as due to change of company by the worker. Hence for some resignation from previous company, the worker remains unemployed.

3. Seasonal Unemployment

Unemployment caused due to seasonal changes in the production of goods and services in a factory/farm is known as seasonal unemployment.

This kind of unemployment is generally found in sugar industry, Tourism sector as well as in Agricultural sector.

4. Disguised Unemployment

When a factory or farm employs more than required workers than disguised unemployment happens. The additional non-required worker does not add up in the productivity of the factory or farm since their marginal productivity remains zer.

This kind of unemployment can be found in the agricultural sector in India, where intensive agriculture is practised and every member of the family involved in the work which is generally not required and does not help to increase the farm production.

5. Cyclical Unemployment

Unemployment caused due to cyclical changes in economy is known as cyclical Unemployment.

For example, cyclical Unemployment happens when economy goes in recession

6. Voluntary Unemployment 

When a person does not able to get employment according to his her choice/knowledge/skill/preference, and he chose to remain unemployed, this kind of unemployment is known as voluntary unemployment.

This happens also occurs when a person does not get adequate amount of salary, amenities and other social benefits in the job.

7. Under Employment

A situation when workers (work force) in a factory/farm remains under utilised whether in terms of skill time is known as Under-Employment.

Division of Human Resource

On the basis activity status, human resource is divided into three categories:- 

1. Work Force

The number of people, who are working or employed in any kind of job in an economy is termed as  work force. It includes only working population.

2. Labour Force 

The number of working/employed people and persons who are seeking or available ot do a job in an economy is termed as labour force.

It includes both employed and unemployed population of the economy under consideration.

3. Outside the Labour Force

Individuals who are unemployed and are not seeking or not available for a job is known as the population outside the labour force.

Estimation Methods

In India unemployment is estimated by National Sample Survey Organisation (NSSO) from 1950, since it's inception.

NSSO collects employment-unemployment data on the basis of three approaches given below:-

  1. Usual (Principle Status and Subsidiary Status) Approach(UPSSSA):- In this approach unemployment data is collected with a reference period of 365 days preceding the date of survey.
  2. Current Weekly Status Approach (CWSA):- In this approach the employment-unemployment data is collected with a reference period of even days preceding the date period of survey.
  3. Current Daily Status Approach(CDSA):- In this approach the employment data is collected with the reference of each day preceding the 7 days before the conduction of such survey.

Initially upto 9th Round Survey, NSSO conducted Employment-unemployment surveys only on the basis of UPSSSA approach only. But from 10th Round of the survey it started collecting data on the basis of CWSA approach also in addition to UPSSSA.

Planning Commision set up Committee of Experts on Employment Estimates(Dantewala Committee) in 1960. This committee recommended to conduct surveys on the basis of Current Daily Status Approach (CDSA) in addition to previous to approaches i.e. UPSSSA and CWSA. Hence, from 27th Round Survey (1972-73) and onwards, CDSA approach is also started to be used by NSSO, while conducting quinquennial surveys (5 yearly surveys).

In order to measure Employment-unemployment level on annual basis Labour Bureau started conducting from 2009 annually. These surveys are being conducted on the basis of all the three approaches in addition to subsidiary status approaches.

Besides above, quick quarterly Enterprise Level Surveys (Quick Employment Survey) are also conducted by Labour Bureau after every three months. This is done to get to know about the current scenario of employment at much shorter interval o time.

Pay Roll Data

From 2018, in addition to all above methods. pay roll data of formal sector started to be used to calculate the employment level in the country. For this purpose monthly data is collected from EPFO, ESIC and PFRDA. 

Level of unemployment in India

According to Periodic Labour Force Survey(PLFS), 2018-19, Unemployment rate in India was  5.8%. It was 5.6% among males and 3.5% among females in rural areas. The unemployment level was even more in urban areas where 7.1% males and 9.1% females were unemployed.

Even more depressing thing is that unemployment rate among the population more than 15 ears of age (with Highest level of education i.e. secondary and above) is 11.0% i.e. 11.2% in rural areas and 10.8% in urban areas.

In addition to above the unemployment rate among rural male youth between 15-29 years of age) was 16.6%, while the unemployment rate among the rural female youth was 13.8% during 2018-19. The employment rate among the urban male youth was 18.7% and the unemployment rate for urban female youth was 25.7%  during this period.

Government Schemes to Control Unemployment

  1. Integrated Rural Development programme (1977):- To provide employment opportunities for BPL  families and increasing their financial position through Financial assistance.
  2. Swarna Jayanti Shahari Swarojgar Yojna (1997):- To provide employment in urban areas.
  3. Sampurna Gramin Rojagar Yojana (2001):- This resulted due to merger of Employment Assurance Scheme(EAS) and Jawahar Gramin Rojagar Yojna(1964).
  4. National Rural Employment Guarantee Scheme (MNREGA )(2004):- 100 days employment Guarantee to adult laborers belonging to unskilled category (renamed as MNREGA in 2009) 
  5. PM Gramodaya Yojna (2008-09):- To promote housing among por living BPL.
  6. Self Help Groups (SHGs):- To promote a operation an social financial  and work culture.
  7. Sarva Shiksha Abhiyan (2000-01):- Under this scheme students of government schools are provided books and other study materials free of cost.
  8. Make in India (2014):- This scheme was launched by Government of India to encourage companies to manufacture in India through various kinds of incentives into manufacturing sector and easing out business in India through fundamental changes in industrial policy.
  9. Skill India (2015):- Skill India or National Skill Development Mission was launched in 2015 by PM Modi with the to increase the level of skill of labour force in India. This is being managed by National Skill Development Corporation (NSDC).
  10. Startup India(2016):- This scheme was first announced on 15th August 2015 by PM Modi, but launched on 16th January, 2016. This scheme focuses on three things first is easing out the licensing and establishment process for budding entrepreneurs, second is to provide such entrepreneurs support and incentives to establish their firm and third is to boost the Industry-Academia partnership and incubation.
  11. Standup India (2016):- This program was started on 5th April, 2016 by Government of India to support Women, SC and ST entrepreneurs financially. The scheme offers bank  loan of ₹10 lakh to ₹1 Crore to Women and SC & ST.