Answer to Question #256872 in Macroeconomics for Vinu

Question

In a developing economy like India what kind of unemployment are found? Explain. Which type of unemployment according to you is more problematic for economy and why?

Answer 1

• Disguised unemployment- under this type of unemployment, people appear to be employed while actually they are not adding to the productivity of the economy. For example, in the case where family members are engaging in an agricultural activity.
• Seasonal unemployment- this type of unemployment is rampant in the agricultural sector where people become unemployed during certain months of the year.
• Educated unemployment- occurs when a person is educated but is not able to find a suitable and efficient job for himself/herself.

Structural unemployment is the most problematic type of unemployment because it is caused by forces other than the business cycle. It is more permanent in nature as compared to other types of unemployment.