1. MANAGERIAL ECONOMICS
EMPLOYMENT AND
UNEMPLOYMENT IN INDIA

2. CONCEPTS
EMPLOYMENT
• The state of being employed
• Persons holding job
• Persons performing any paid work
• Persons absent due to illness, strike or
vacation are considered as employed

3. CONCEPTS
Contd…
FULL EMPLOYMENT
• State of economy in which all eligible people
who want to work can find employment at
prevailing wage rates
• However, it does not imply 100% employment
because of allowance for frictional
unemployment and seasonal factors

4. CONCEPTS
Contd…
UNDER EMPLOYMENT
• A situation in which a worker is employment
but not in the desired capacity whether in
terms of compensation, hours or level of skill
or experience

5. TYPES OF UNEMPLOYMENT
• Frictional unemployment
• Structural unemployment
• Cyclical unemployment
• Technological unemployment
• Seasonal unemployment
• Disguised unemployment

6. FRICTIONAL UNEMPLOYMENT
• Unemployment that occurs naturally during
normal working of economy
• Temporarily caused due to inefficient movement
of people between regions and jobs
• New workers searching for job
• Voluntary switching of job
• Fired or seeking reemployment
• Company abstains from hiring because it believes
there are not enough qualified individuals
available for the job when in actuality there is

7. STRUCTURAL UNEMPLOYMENT
• Joblessness caused not by lack of demand but by
changes in demand patterns or obsolescence of
technology and required retaining of workers and
large investment in new employment
• Arises from mismatch between the jobs available
in the market and the skills of the available
workers in the market
• Change in industrial structure of a country
• Change in technology
• Change in requirements of skill

8. CYCLICAL UNEMPLOYMENT
• Cyclical unemployment is the fluctuating rate
of employment resulting from swings in the
business cycle
• Increases during recession
• Decreases during an expansion
• Example: An auto worker may be laid off
during recession when people are buying
fewer cars

9. TECHNOLOGICAL UNEMPLOYMENT
• Caused by technological changes or new
methods of production
SEASONAL UNEMPLOYMENT
• Caused by a seasonal variation in the structure
of jobs
• Typically repeats the same pattern annually

10. DISGUISED UNEMPLOYMENT
• Exists where part of the labor force is either
left without work or is working in a redundant
manner where worker productivity is
essentially zero
• An economy demonstrates disguised
unemployment where productivity is low and
where too many workers are filling too few
jobs

11. DISTRIBUTION OF EMPLOYED
PERSONS BY BROAD INDUSTRY GROUP
• Agriculture, Forestry and Fishing 45.5%
• Mining & Quarrying 2.10%
• Manufacturing 8.90%
• Electricity 1.80%
• Construction 7.50%
• Wholesale, Retail 8.80%
• Transport, Storage 4.10%
• Finance, Insurance 2.60%
• Community Service 8.40%
• Others 10.30%
• TOTAL 100.00%

12. TECHNOLOGY AND EMPLOYMENT
• IT and IT enabled services to grow to 5.3
million by 2022
• India has highest young population
• India produces more engineers
• BPO mushroomed but USA policies may affect