Unemployment in India-Economic and social point of view

Unemployment in India-Economic and social point of view

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  Rahulkumar C. Mahida Subject:-LabourEconomics Roll No.42 PGDLP/MSU/BARODA December 17th,2015
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  Content • Introduction • Classificationof unemployment • Types of unemployment in India • Causes of unemployment • Cost(consequences) of Unemployment • Measurements of Unemployment in India • Policies to combat Unemployment in India • Solutions
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  UNEMPLOYMENT • Unemployment refersto a situation in which the workers who are capable of working and willing to work do not get employment. • In economics, unemployment refers to the condition of unwanted job losses, or willing workers without jobs. The willingness of the unemployed worker to be employed is the key to the idea.
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  Continue.... A person whois :- Physically Fit Mentally sound Well qualified Willing to work at prevailing wage rate BUT DOES NOT GET JOB, THIS SITUATION IS CALLED UNEMPLOYMENT
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  Classification Of Unemployment Unemployment Involuntary Structural Frictional Cyclical Seasonal Disguised Voluntary
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  • Unemployment thatresults when resources which are willing and able to engage in production choose not to produce output. These are resources (especially labour) that decide to leave one job, often in search of another. voluntary • The contrast to voluntary unemployment is involuntary unemployment, in which resources are forced out of work. Involuntary unemployment is also known as Forced Unemployment. Involuntary
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  Conti…. • Arises dueto structural change in dynamic economy making some workers go out of the job. Under structural unemployment, a person either goes out of the job or remains unemployed for prolonged period of time till he acquires new skills. • Defined as the no. of unemployed persons under the condition that the no. of job vacancies equals the no. of job seekers who somehow fail to get the job. • It is said to exist when job vacancies equal the job seekers and yet some persons are unemployed. Structural Unemployment Frictional Unemployment
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  Conti…. • cyclical unemploymentis the result of businesses not having enough demand for labour to employ all those who are looking for work. When business cycles are at their peak, cyclical unemployment will be low because total economic output is being maximized. When economic output falls, the business cycle is low and cyclical unemployment will rise. • Seasonal unemployment occurs at certain seasons of the year. Refers to a situation where a number of persons are not able to find jobs during some months of the year. Cyclical Unemployment Seasonal unemployment:
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  Conti…. •Unemployment that doesnot affect aggregate output. •Disguised unemployment exists where part of the labour force is either left without work or is working in a redundant manner where worker productivity is essentially zero. • is a condition in which people have no work to do. They are able to work and are also willing to work but there is no work for them. • usually refers to that state in which the self employed working people are not working according to their capacity. Disguised unemployment: Open Unemployment Underemployment
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  Where India stands..
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  • Economic inflation •Rapid Population growth. • Seasonal Employment. • Technological Advancement • Joint Family System. • Demand increased for high skilled workforce • Slow Developing Industries. • Insufficient Rate of Economic Progress. Genesis Of Unemployment
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  Cost Of Unemployment •Increase in social problems : Areas of high unemployment (especially youth unemployment) tends to have more crime and vandalism • Loss of self esteem : Those who are unemployed will find it more difficult to get work in future(this is known as hysteresis effect) . • Loss of pay check : Loss of earnings to the unemployed Individual Cost Of Unemployment
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  Continue… • Loss inoutput : Labour has productivity, high or low, depending on its skill and availability of capital per labour. Therefore, unemployment means loss of output expected from the employment of unemployed labour force. • Increased Govt borrowings: Tax revenue will fall because there are less people paying Income Tax and VAT. Also the Govt will have to spend more on unemployment benefits. • Lower GDP for the economy : The economy will be below full capacity. This is inefficient and will lead to lower output and incomes. Economic cost of Unemployment :
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  • Economists typicallyfocus on the unemployment rate. The unemployment rate is expressed as a percentage, and is calculated as follows: • Unemployment rate=unemployed worker/total labor force*1oo • As defined by the International labour organization, "unemployed workers" are those who are currently not working but are willing and are able to work for pay, currently available to work, and actively searching for work . • In India NSSO(National sample survey organization), uses three concepts of unemployment: • Usual status of unemployment (1 year) • Current weekly status of unemployment (1 day) • Current daily status of unemployment (1 hour) Measurement
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  • Usual status:This measure estimates the number of persons who may be said to be chronically unemployed. This measure generally gives the lowest estimate of unemployment especially for a poor economy because only a few can afford to remain without work over a long period. • Current Weekly Status (CWS):This estimate reduces the reference period i.e. the period for which data is collected to one week. According to this estimate a person is said to be employed for the week even if he is employed only for a day during that week. • Current Daily Status (CDS): The reference period here is a day. It counts every half day's activity status of the respondent over the week.
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  Policies to reduceUnemployment • NREGA • Sampoorna Grameen Rozgar Yojna • Swarna Jayanti Gram Swarozgar Yojna • Prime Minister’s Employment Generation Programme • National Food for Work Programme • Prime Ministers Integrated Urban Poverty Eradication Program (PMIUPEP)
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  Solutions • POSSIBLE SOLUTIONOF UNEMPLOYMENT • Frictional unemployment Solution If unemployment benefits were reduced unemployed workers might become more willing to work (shift the aggregate supply of labour to the right) Improve awareness of available jobs. • Structural Unemployment solution Adult retraining programmes Government gives subsidies to firms that provide training for workers Enhance geographic mobility by building affordable housing or give subsidies/tax breaks Set up apprenticeship programmes to allow people to gain skills. • Seasonal unemployment solutions Encourage people to take different jobs in their off season Reduce unemployment benefits Greater flow of information • Disguised unemployment Create employment opportunities in the urban areas and rural area.
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  References: • Ahuja Ram,(1992) Social problems in India, Rawat Publication, Jaipur • India labor and employment report 2014/ Published by Academic Foundation, New Delhi & Institute for Human Development, New Delhi 2014/ http://www.academicfoundation.com/ISBN 978-93-327-0120-5 • National Sample Survey Organisation, (2008), “Employment and Unemployment Situation in India 2005-2006”, 62nd Round, Report No 522, Ministry of Statistics and Programme Implementation, Government of India Report of The working group On Employment, planning & policy For the Twelfth five year plan (2012- 2017) Government of India Labour, employment & manpower (LEM) division Planning commission December 2011 • Youth employment and unemployment: an Indian perspective / Arup Mitra and Sher Verick; International Labour Organization, DWT for South Asia and Country Office for India. - New Delhi: ILO, 2013 • http://www.preservearticles.com/201105096376/what-are-the-causes-of- unemployment-in-india.html