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Unemployment – Definition, Types, Factors, Disadvantages

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People as a resource are defined as people who are a part of the workforce and play a significant role in economic growth by contributing to the productive resources of the country. For the development of the country. A country also needs people who can put those resources to good use and increase production along with various other resources.

To get more resourceful people country needs to do invest in human resources or human capital and it is done through training, education, and healthcare, making the workforce more productive and hence it will be more  beneficial for the economy

It refers to a country’s working people in terms of their existing productive skills and abilities like other resources Population is also a resource i.e. a human resource and it has the ability to contribute towards the creation of gross national product when the existing human resource is further developed by becoming more educated and healthy then it is called human capital formation. This human capital formation leads to higher income earned because of higher productivity.




The inability of a willing person to find work can be defined as Unemployment. Any skilled person who is looking for a job with all the necessary qualifications is unable to secure some work for himself is said to be unemployed. In other words, It is the condition where people of the working-age are incapable of finding an occupation for themselves. 

The rate of unemployment in India for people above the age of fifteen is around 9 %. This rate varies with different aspects when different factors are involved.

For example, women’s unemployment rate is more as compared to men’s. Similarly, in rural areas numbers of unemployed people are high as compared to urban areas.

Unemployment is a curse and the biggest problem of any country. It is clearly a waste of the human resource of a nation which can lead to many problems such as an increase in the rate of poverty and a decrease in the health of people. If this problem of unemployment is left unmanaged then it can lead to social unrest.  Circumstances of Unemployed people can easily get involved in doing illegal things or loss the economy of the country.

Sometimes it also creates an extra burden upon their families and the government. Therefore it is very important to manage the situation of unemployment in the country. In India, we have unemployment in rural and urban areas but unemployment differs in rural areas and urban areas. 

Types of Unemployment 

In rural areas, unemployment is mainly of two types: Seasonal unemployment and Disguised unemployment,

  1. Seasonal unemployment: It can be explained as the phenomenon where people are employed only for a particular period during the season in a year. For example, Agricultural labourers are dependent upon agriculture season work only in the busy season such as sowing, weeding, threshing and harvesting. when it’s done labourers don’t get much work for the rest of the year. This type of seasonal unemployment occurs mostly in rural areas.
  2. Disguised unemployment: When marginal physical productivity of labour is zero or sometimes it becomes negative is termed as disguised unemployment. This is the condition when more people are hired or employed to do work that can be easily done by a lesser number of people. In this, there would be no negative effect or impact on their productivity even if some people are removed. For example Family find work at an agricultural plot then the whole family is engaged in work that already requires a less number of people. If the cultivation of one-hectare land requires 5 workers but 8 are working here 3 extra employees or workers are disguised as unemployed as they are not adding to productivity.

In urban areas have mainly Educated unemployment, which can be defined as,

  • Educated unemployment: India’s educated young are facing severe challenges one of them is educated unemployment. The causes of educated unemployment depend on factors and the most common factor is a lack of job opportunities. This happens when there are few job openings and employers but are a significant number of people for the job. There has been an unsettling period of widespread unemployment among the educated youth.

For example, Graduates and post-graduates are stumbling from pillar to pillar in search of work. Even the country’s economic growth is also directly related to such issues, Decrease in economic growth leads to an increase in the rate of unemployment or underemployment.

The Main Cause of Educated Unemployment is that individuals are willing to work but they are unable to do as there is no suitable job available according to their qualifications. it is one of the major causes of India’s poverty and backwardness.

Factors Responsible for the Unemployment 

  • Rapid Growth Of Population: As the population has increased at a very high rate but as compared to the increase rate of populations, employment opportunities have not increased which leads to a higher rate of unemployment.
  • Overdependence on Agriculture: Even after 72 years of independence more than 60 % of the population is dependent on the primary sector for its livelihood. Family find work at agricultural plot then the whole family is engaged in work which already requires a less number of people. If the cultivation of one-hectare land requires 5 workers but 8 are working here 3 extra employees or workers are disguised as unemployed as they are not adding to productivity.
  • Underdevelopment of Cottage and small scale industries: One of the major causes of unemployment rural areas are facing due to the development of the cottage and small scale industries. For example employment in Seasonal Occupations like agriculture, ice-cream factories, textile industry give employment for only a specific period only.
  • Underdevelopment of industries: Another factor which is responsible for the unemployment in India is a shortage of capital and other essential inputs, the industrialisation process is very slow that it failed to provide enough job opportunities to the unemployed worker
  • Slow pace of infrastructure growth: Slow pace of infrastructure growth is mainly responsible for the slow growth of the Indian economy. and slow economic growth leads to unemployment.

Disadvantages of Unemployment

  1. Wastage of resources: One of the most important resources to develop the country is human capital. Because of unemployment, it leads to wastage of human resources.  there is a feeling of hopelessness and despair among the youth people who are the assets for the economy turn into a liability.
  2. Poverty:  Unemployment is the basic cause of poverty, even people don’t have money to support their families, Inability of educated people who are not getting employment implies a great social waste.
  3. Increase independent population: Unemployment leads to an increase in the economic burden. This also leads to an increase in the dependency of the unemployed on the working population increases.
  4. Poor Quality of life: Because of the increase in unemployment the quality of life of family society as well as of individuals are adversely affected. when a family has to survive on minimum resources then there will be a decline in their health status and rising withdrawal from the school system :
  5. Class Struggle: Unemployment leads to the divides the society into haves and has not. It results in class conflict that compounds the problem of social turmoil.

Frequently Asked Questions

Define resources and Natural resources.

It refers to the material which we can transformed in a way that it becomes more useful and valuable. Any resources available on the earth that people use to meet their needs is termed as Natural resources.

What is the meaning of Gross National Product?

The money value of all goods and services produced by the residents living in or outside the country is termed as Gross National Product.

Define Birth rate and Death rate?

The number of babies born in a place for every 1000 people during a particular time period is termed as Birth Rate. The number of people died in a place per 1000 during a particular time period is termed as Death Rate.  

Write factors responsible for unemployment prevailing in rural areas?

Factors responsible are,

  • Over population which leads to large families but less resources .
  • Decline in cottage and small scale industries .
  • Lack of change in agricultural policies .
  • Due to lack of capital for investment .

What is Educated Unemployment?

It refers to the situation where people are educated but unable to get the employment, which is the another reason of poverty and it basically found in rural areas.

Last Updated : 08 Sep, 2023
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