Concept of Unemployment

• Unemployment exists when people who are willing and able to work at the prevailing wage cannot find jobs.
• It refers to people who are jobless, actively seeking work, and available to take up employment.
• Children below 15 years, elderly persons above 59 years, and persons not willing to work are not considered unemployed.

• Rapid population growth and imbalance between employment opportunities and population.
• Slow economic growth resulting in inadequate job creation.
• Inadequate skills and mismatch between education and industry requirements.
• Technological changes making some skills obsolete.
• Frequent shift between jobs leading to temporary unemployment.
• Seasonal nature of agricultural and certain other occupations.
• Fluctuations in the economy and industrial recessions.
• Gap between demand and supply of labour.
• Preference for white-collar jobs by many educated youth.

• Wastage of human resources.
• People who are an asset become a liability to the economy.
• Educational stagnation and skill deficiency.
• Underemployment.
• Poverty and low standard of living.
• Increased dependency on the working population.
• Anti-social and undesirable activities.
• Mental health problems such as frustration, depression and hopelessness.
• Children may be withdrawn from school to work.
• Slow economic growth and adverse impact on national development.

A graduate in a small town finds only seasonal farm work, remaining unemployed most months. Many engineers in cities work jobs well below their qualifications (underemployment).

• Unemployment refers to persons in the 15–59 years age group who are able and willing to work at the prevailing wage but cannot find employment.
• Children, elderly persons and those unwilling to work are not counted as unemployed.
• Major types of unemployment are open, seasonal, disguised, educated and underemployment.
• Rural unemployment is mainly seasonal and disguised, while urban unemployment is mainly educated and open unemployment.
• Major causes include population growth, inadequate skills, seasonal employment, technological changes, economic fluctuations and mismatch between demand and supply of labour.
• Unemployment leads to wastage of human resources, poverty, educational stagnation, mental stress, anti-social activities and slow national development.