Unemployment
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Unemployment occurs when a person who is actively searching for employment and ready to accept work at current wage rate and still unable to find work.
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It is used as a measure of the health of the economy.
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It has been a burning problem of modern societies, whether developed or undeveloped.
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It is measured in terms of unemployment rate = no. of unemployed/ total labour force
Types:
Voluntary unemployment:
Frictional Unemployment:
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Temporary phenomenon,
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Workers temporarily out of work while changing jobs
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Strikes and lockouts
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It is due to difficulties in getting workers and vacancies together.
Casual unemployment:
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Where workers are employed on a day-to-day basis
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Occurring due to short-term contracts, which are terminable any time
Seasonal unemployment:
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Some industries and occupation in which production activities are seasonal in nature
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Agro-based industrial activities like sugar mills etc.
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Offer employment only for a certain period of time in a year
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Can find in any country, causes wastage of resources,
Structural unemployment:
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Due to structural changes in the economy, it taken place
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Decline in demand for production lead to reduction in its manpower requirements
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E.g. improvement of transportation in Towns, tongas become out dated and tonga operators become unemployed, therefore, they need to search jobs in any other industry
Technological unemployment:
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It arise as a result of technological improvement
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Due to improvement in machinery, production methods, some workers are replaced by Machines
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e.g. due to the arrival of computers, typewriters lost their jobs.
Cyclical unemployment:
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Trade cycles, recessionary and depressionary phases
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Deflationary period, demands decline, production decreased and need to reduced workers
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Unemployment caused by insufficiency of effective demand
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Short term phenomenon
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Increasing total expenditure and pushing up the level of effective demand, can reduced this kind of unemployment
Chronic unemployment:
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Unemployment tends to be a long-term feature of a country it is called chronic unemployment.
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Underdeveloped country
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Vicious circle of poverty
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High population growth
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Backward or primitive technology
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Low capital formation, are causes for this
Disguised unemployment:
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Situation of employment with surplus manpower, some workers have zero marginal productivity, removal of them will not affect the volume of total output
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Suppose, for one work four man work effectively, if there are six people involved with that work they are not contributing anything in additional production
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Their marginal productivity is zero