Unemployment and Underemployment

$$Unemployment\%=\frac{Unemployedpeople}{LabourForce}\times 100\%$$

Sources of data on unemployment (quote in mains)

• Reports of Census of India
• Periodic Labour Force Survey by NSO
• Directorate General of Employment and Training data of registration with Employment Exchanges
  • under Ministry of Labour and Employment

Types of Unemployment

1. Structural: long lasting, due to fundamental shifts in economy
   • workers lacking new job skills
   • change in govt policy
   • change in tech
   • mismatch b/w what companies want and what workers can offer
2. Cyclical: cyclical trends in business (upturns and downturns)
3. Frictional: people moving b/w jobs, location
   • can inc during upturns where people switch jobs in ambition of higher wages
4. Seasonal: when people unemployed at certain times of year
   • tourism & leisure
   • farming
   • sugar
5. Disguised: part of labour is working in redundant manner
   • zero marginal productivity
   • eg. in agri
6. Open Unemployment: owing to lack of work are not working but seeing other work thru exchanges, friends, applications etc

Underemployment

• worker employed but not in desired capacity
  • skilled worker in low paying jobs
  • skilled worker in low skill job
  • part time workers preferring full time jobs
• affects job growth, poverty, economic growth and emotional health of worker
• vicious cycle $\to$ underemployed workers have less income and difficult to find full time jobs $\to$ keep switching jobs while being underemployed everywhere $\to$ affects economy as a whole