Employment & Unemployment
Types of unemployment, how it is measured through the Periodic Labour Force Survey, key labour indicators, and the challenge of India's informal economy.
Key Takeaways
- Unemployment takes many forms — disguised, structural, cyclical, frictional and seasonal.
- India measures employment through the Periodic Labour Force Survey (PLFS) conducted by the NSO.
- The vast majority of India's workforce is in the informal / unorganised sector.
Core concept
Unemployment exists when people willing and able to work at prevailing wages cannot find jobs. In a developing economy like India, the problem is less about open unemployment and more about poor-quality jobs — under-employment, low wages and informality.
Static foundation — types of unemployment
Types of Unemployment
| Type | Meaning | Where seen |
|---|---|---|
| Disguised | More workers than a job requires; marginal productivity is near zero | Agriculture, family enterprises |
| Seasonal | Work available only in certain seasons | Farming, tourism, sugar mills |
| Structural | Skills don't match available jobs | Automation, changing industries |
| Cyclical | Caused by a downturn in the business cycle | Recessions |
| Frictional | Temporary, while moving between jobs | Any dynamic economy |
How Employment is Measured
Tap to reveal.
Value addition — the demographic dividend
India has a young population (a potential 'demographic dividend'), but reaping it needs jobs and skills. Key interventions: MGNREGA (rural safety net), Skill India / PMKVY, PLI schemes (manufacturing jobs), and labour-code reforms. Low female LFPR is a major drag on growth.
Current affairs linkage
Debates on jobless growth, the reliability of employment data, the gig/platform economy and its social security (e-Shram portal), and the four consolidated Labour Codes. (Add the latest PLFS unemployment rate or LFPR figure.)
Prelims trap zones
- Disguised unemployment = surplus labour with near-zero marginal productivity (not the same as 'hidden' joblessness).
- PLFS is by the NSO/MoSPI, not the Labour Ministry.
- LFPR includes those SEEKING work; the Worker Population Ratio counts only those actually working.
Prelims Pointers
- Disguised unemployment (common in agriculture) means more workers than a job actually needs.
- The PLFS uses 'Usual Status' and 'Current Weekly Status' to measure employment.
- Key indicators: Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), Unemployment Rate (UR).
- MGNREGA (2005) provides a legal guarantee of 100 days of wage employment in rural areas.
Mains Angle
- 'India's challenge is not just unemployment but under-employment and informality.' Discuss.
- Suggest measures to raise female labour-force participation in India.
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