Unemployment Notes

Unemployment: A situation where individuals actively seeking employment are unable to find work.
It's a key indicator of economic health.
Governments often provide unemployment insurance to eligible individuals.
Unemployment Rate: The percentage of unemployed individuals in the labour force.

Unemployment rate is calculated as: $Unemployment\ Rate = (\frac{Unemployed\ Workers}{Total\ labour\ force}) × 100$
The unemployment rate is a widely quoted labour market measure.
It indicates the underutilization of the labour supply.
It reflects the economy's ability to provide jobs for those seeking work.
It serves as an indicator of the economy's efficiency in absorbing its labour force.

The National Sample Survey Organization (NSSO) defines employment and unemployment based on an individual's activity status:
- Employed: Engaged in an economic activity (working).
- Unemployed: Seeking or available for work.
- Not in Labour Force: Neither seeking nor available for work.
Labour Force: Includes employed and unemployed individuals.
Unemployment rate = (Unemployed Workers / Total labour force) × 100

Unemployment is a key economic indicator, reflecting the ability of workers to find gainful employment and contribute to economic output.
It doesn't include those who leave the workforce for reasons like retirement or education.
More unemployed workers result in less total economic production.
Unemployed workers require subsistence consumption, leading to lower output without a proportional decline in basic needs.
High unemployment can signal economic distress and lead to social and political instability.
Low unemployment suggests the economy is producing near its full capacity, potentially maximizing output, driving wage growth, and raising living standards.
Extremely low unemployment can be a warning sign of an overheating economy and inflationary pressures.

Voluntary Unemployment: Occurs when a person willingly leaves their job to seek other employment.
Involuntary Unemployment: Occurs when a person is fired or laid off and must search for another job.

Underemployment: A situation where a person is not working full time or is working in a job that doesn't utilize their skills and training.
This is distinct from unemployment, where individuals are not employed at all.

Disguised Unemployment: More people are employed than needed, commonly found in unorganized or agricultural sectors.
Structural Unemployment: Mismatch between workers' skills and available jobs, often due to a lack of required skills or poor education levels.
Seasonal Unemployment: Unemployment that occurs during specific seasons of the year, common for agricultural laborers in India.
Technological Unemployment: Job loss due to advancements in technology. A World Bank study in 2016 predicted that 69% of jobs in India are threatened by automation.
Cyclical Unemployment: Unemployment caused by business cycles, increasing during recessions and decreasing with economic growth. Cyclical unemployment is negligible in India, mostly found in capitalist economies.
Frictional Unemployment: Short-term unemployment as people search for new jobs or switch between jobs, often considered voluntary unemployment.
Educational unemployment: Educated people are not getting job as per their educational qualifications.

Unemployment Rate = (Unemployed Workers / Total labour force) × 100
NSSO measures unemployment in India using three approaches:
- Daily Status Approach: Measures unemployment for each day in a reference week. A person with no gainful work for even one hour is considered unemployed for that day.
- Weekly Status Approach: Records individuals who did not have gainful work or were unemployed for at least an hour on any day of the preceding week.
- Usual Status Approach: Estimates individuals who were unemployed or had no gainful work for a major time during the 365 days preceding the survey.