Employment and Unemployment

Question 1

Unemployment

Answer 1

A phenomenon that occurs when a person who is capable of working and is actively searching for the work is unable to find work

Question 2

Unemployment rate

Answer 2

is defined as a number of unemployed people divided by the number of people in the labour force

Question 3

labour Force

Answer 3

Persons who are either working (or employed) or seeking or available for work (or unemployed) during the reference period together constitute the labour force.

Question 4

Work force:

Answer 4

All people in age group of 15-59years.

Question 5

Employment rate.

Answer 5

the ratio of employed person to population(15 to 59 years)

Question 6

Employment elasticity

Answer 6

Percentage changes in employment induced by changes in GDP which captures responsiveness of labour market.

Question 7

Employment intensity

Answer 7

Extent to which growth creates employment.

Question 8

Measure of Unemployment

Answer 8

Usual Status Unemployment (US)

Current Weekly Status Unemployment (CW):

Current Daily Status Unemployment (CDS)

Question 9

Usual Status Unemployment (US)

Answer 9

Here the reference period is 365 days. The usual status gives an idea about long-term employment (or chronic and open employment) during the reference year. A person is considered unemployed on Usual Status basis, if he/she was not working, but was willing to work for the major part of the reference year

Question 10

Current Weekly Status Unemployment (CW):

Answer 10

Here the reference period is one week A person is considered unemployed by Current Weekly Status, if he/she had not worked even for one hour during the week, but was seeking or was available for work. The Current Weekly Status approach gives an idea about temporary unemployment

Question 11

Current Daily Status Unemployment (CDS)

Answer 11

Here the reference period is each of the 7 days preceding the date of survey in each of these days. It records the activity status of a person for each day of the 7 days preceding the survey i.e. persons who did not find work on a day or some days during the survey work. The Current daily status approach gives a composite or comprehensive measure of unemployment, i.e. it is a measure of chronic unemployment.

Question 12

Types of Unemployment

Answer 12

Voluntary Unemployment
Involuntary Unemployment
Frictional Unemployment
Cyclical Unemployment
Structural Unemployment
Seasonal Unemployment
Disguised Unemployment
Under Unemployment

Question 13

Voluntary Unemployment

Answer 13

Voluntary unemployment refers to a situation where workers are either not seeking for work or are in transition from one job to another.

Question 14

Involuntary Unemployment

Answer 14

Involuntary unemployment refers to a situation where workers are seeking work and are willing to work but are unable to get work.

Question 15

Frictional Unemployment

Answer 15

The minimum amount of unemployment that prevails in an economy due to workers quitting their previous jobs and are searching for the new jobs is called Frictional Unemployment.

This type of unemployment is of voluntary nature.

Question 16

Cyclical Unemployment

Answer 16

Cyclical unemployment is due to lack of demand in the economy and slowdown of economic activity.

Cyclical unemployment is a type of unemployment which is related to the cyclical trends of booms and recessions of the business cycle.

This type of unemployment is of involuntary nature,

Question 17

Structural Unemployment

Answer 17

It refers to a situation which arises due to change in the structure of the economy or mismatch of skills. Ex: An economy transforms itself from a Labour intensive economy to a Capital intensive economy.

Question 18

Seasonal unemployment

Answer 18

Seasonal unemployment occurs during certain seasons of the year. It Occurs in Agricultural sector, Tourism sector and in factories producing seasonal goods. Therefore, they offer employment for only a certain period of time in a year.

Question 19

Disguised unemployment

Answer 19

Disguised unemployment is when too many people are employed than what is required to produce efficiently

Production does not suffer even if some of the employed people are withdrawn

The key point to remember is that the marginal productivity of labourers under disguised unemployment is zero.

Question 20

Underemployment

Answer 20

Underemployment is the most dangerous kind of unemployment in an economy. Under employment is a situation under which People with a higher level of skills are employed in less productive jobs. It simply means that the Labour force of the economy is not fully utilised as per their skills and experience.

Question 21

Formalization of jobs: Reasons

Answer 21

With introduction of GST

Digitization of payments,

Direct benefit transfer of subsidies/scholarships/wages & salaries to bank accounts,

Opening of Jan Dhan accounts

Extending social security coverage to more workers

Question 22

Formalization of jobs: Steps taken

Answer 22

EPFO: Use of UAN - Universal Account Number

PM Rozgar Protsahan Yojana: See Schemes - 12% contribution by govt for salaries up to 15k

Mandatory wage ceiling of subscription to EPS increased from 6,500 to 15,000 per month

Rate of ESI contribution reduced from 6.5 per cent to 4 per cent with effect from 1st July, 2019. Employer’s share of contribution reduced from 4.75 per cent to 3.25 per cent and employees’ share from 1.75 per cent to 0.75 per cent.

NCS

Question 23

Formalization of Jobs: NCD

Answer 23

National Career Service (NCS) Project launched in 2015

Provides a host of career-related services such as dynamic job matching, career counselling, job notifications and information on skill development courses and rich career content on a digital platform (www.ncs.gov.in).

NCS works towards bridging the gap between job-seekers and employers candidates seeking training and career guidance, agencies providing training and career counselling by transforming the National Employment Service.