The national sample survey organisation
(NSSO) has define unemployment on three
concepts namely: usual status, weekly
status, and daily status.
TYPES OF UNEMPLOYMENT
Unemployment can be divided into two basic
(a) Unemployment that results from deficient aggregate
(b) All other types of employment that are-:
Due to demand deficiency
In this unemployment and unfilled vacancies exist
simultaneously because it take time to match job
requirements and the skill of job seekers
The unemployment that exists during this matching
process is frictional unemployment, which strictly
defined is unemployment that corresponds to
unfilled vacancies in the same occupations and the
This type unemployment is unavoidable for the
efficient working of an economy. It exists because
people move and should be encouraged to move
from places, jobs and industries where their
productivity is low to places where productivity is
This type of unemployment results when the unemployed
are mismatched with job vacancies because they do not
have the right skills or live in places there top opportunities
do not exist. Such mismatching creates structural
Technological change could lead to a rise in structural
unemployment in three ways:
(a) an acceleration of the overall rate of productivity change
(b) an increased concentration of productivity gains in
select group of industries
(c) a change in the qualitative impact of productivity
increases on the occupational and skill structure of the
demand for labor.
(d) finding job for the structurally unemployed required
more than a search in the local market, workers must
be retrained or jobs or works must move to new
The term seasonal unemployment is self explanatory. Seasonal
unemployment occurs in such activity as construction,
agriculture, canning and the tourist trade in which weather or
the calendar determine when production can be carried on they
govern the level of demand.
For purposes of measuring business cycle and the strength of
the demand in the labor market, it is normal to use
unemployment statistic that have been seasonally adjusted.
This adjustment does not remove the seasonal component of
unemployment from the total, it merely spreads it evenly over
UNEMPLOYMENT DUE TO
It is defined as unemployment that occurs when there is not
enough aggregate demand to provide work for the whole labor
force no matter how it is trained or deployed. This implies that
in the economy as in whole there are more unemployed
workers then the job vacancies.
Formerly knows as ‘cyclical unemployment', demand-
deficiency unemployment has the virtue of indicating that there
may not be adequate demand even at a business cycle peak.
Demand-deficiency unemployment can be eliminated by
stimulating aggregate demand pro conscious use of monitory
and fiscal policies.
Voluntary and Involuntary
The basic idea of the division is that a worker is voluntarily
unemployed when he has been offered a job that he could fill
but continued for a search for better job at higher wages rather
that accept the offer.
The worker is involuntarily unemployed if he would be willing
to accept a job for which he is qualified at the prevailing wage
or below it, but cannot find a job.
Voluntary is frictional and involuntary is demand deficiency
The term disguised unemployment is used to refer to
individuals who are not economically involved to a degree
which uses their full capabilities even though there are
economic activities to which they apply a part of their time.
The departure of such individuals from their place of
employment may leave some parts of the area’s economic
This fact prompted some writers to suggest for them a zero
marginal product. But their departure might reduce the
amount of effort available to the community at critically
junctures in the agricultural work cycle and thus erode the
annual agricultural productivity.
Main causes of unemployment in
The main causes of rural employment are explosive
population growth, backward and seasonal agriculture,
poverty, decay in small scale and cottage industries,
defective social system, less means of self-employment,
joint family system and immobility of labor.
On the contrary causes of urban unemployment are
slow pace of growth, defective education system, more
emphasis on capital intensive techniques, slow growth
of tertiary sector, lack of vocational and training
facilities, defective employment planning etc.
In developed countries, the volume of employment, at a
given time is determined by the aggregate demand. A
shortage in aggregate demand is the main cause of
unemployment in developed countries.