Employment

and
Unemployment

CHAPTER - 10
 Index

1. What is employment?
2. Worker and its types
3. Concepts of workforce, labour force and work supply
4. Casualization of workforce (Imp)
5. Informalization of workforce (Imp)
6. Causes, Consequences and measures to overcome poverty (Removed)
7. GDP growth and employment growth (imp)
8. Policies and programs of government to overcome unemployment
9. Occupational structure
10.Extra questions
What Is employment?
What Is employment?
Employment refers to the situation where person is engaged in
productive activity
What Is employment?
Employment refers to the situation where person is engaged in
productive activity

Who is worker?
.
What Is employment?
Employment refers to the situation where person is engaged in
productive activity

Who is worker?
A person is said to be a worker if he is engaged in productive activity.
 Types of Worker
Self Employed Worker:
These are those workers who are engaged in
their self owned business or profession.
For example Doctor running his own clinic,
person running his own grocery store. They earn
income in the form of profit or fee.

Hired Worker:
These are those workers who work for others.
These workers render their service and get
reward in return. For example teacher teaching
in a school.
 Types of Hired workers

Casual / Temporary workers :

These are those workers who work on daily wage basis. For example laborers
Features
•They get wages on daily basis.
•They do not enjoy any social security like provident fund, medical insurance etc.
•Their economic status is generally low.
 Types of Hired workers

Casual / Temporary workers :

These are those workers who work on daily wage basis. For example laborers
Features
•They get wages on daily basis.
•They do not enjoy any social security like provident fund, medical insurance etc.
•Their economic status is generally low.

Regular / Permanent Worker

These are those workers who are on the pay roll of the company. For
example clerk , officers etc.
Features
•They get salary on monthly basis.
•They enjoy social security like provident fund, medical insurance etc.
•Their economic status is generally high.
Concepts of Labor force, Work force and Labor supply
 Concepts of Labor force, Work force and Labor supply

Labor force :
It refers to the total no. of workers available in the market who are
ready to work at existing market wage rate
 Concepts of Labor force, Work force and Labor supply

Labor force :
It refers to the total no. of workers available in the market who are
ready to work at existing market wage rate

Work Force :
It refers to the total no. of workers who are actually employed.
 Concepts of Labor force, Work force and Labor supply

Labor force :
It refers to the total no. of workers available in the market who are
ready to work at existing market wage rate

Work Force :
It refers to the total no. of workers who are actually employed.

Labor Supply :
It refers to the total no. of working hours delivered.
 Difference between Labor force and Work Force

Basis Labor Force Work Force

Meaning

Scope

Calculation
 Difference between Labor force and Work Force

Basis Labor Force Work Force

Meaning It refers to the total no. of It refers to the total no. of
workers available in the workers who are actually
market who are ready to employed.
work at existing market wage
rate

Scope Wider scope. As it includes Narrow scope. As it

employed and unemployed includes only employed
workers workers

Calculation Labor force = Work force + Work force = Labor force –

unemployed Unemployed Workers
 Difference between Labor force and Labor Supply

Basis Labor Force Labor supply

Meaning

Measurement
Increment
 Difference between Labor force and Labor Supply

Basis Labor Force Labor supply

Meaning It refers to the total no. of It refers to the total no. of
workers available in the working hours delivered.
country who are ready to
work at existing market
wage rate.

Measurement It is measured in terms of It is measured in terms of

No. of workers. working hours commonly
known as man days.
Increment It can be increased by It can be increased
increasing the no. of without increasing the
workers. no. of workers.
 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

4. Dependency rate = No. of Dependents / Total Population *100

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

4. Dependency rate = No. of Dependents / Total Population *100

5. No. of Unemployed = Labour force – Work Force

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

4. Dependency rate = No. of Dependents / Total Population *100

5. No. of Unemployed = Labour force – Work Force

6. Unemployment rate = No. of Unemployed / Labour force *100

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

4. Dependency rate = No. of Dependents / Total Population *100

5. No. of Unemployed = Labour force – Work Force

6. Unemployment rate = No. of Unemployed / Labour force *100

7. No. of employed = Labour force – No. of unemployed

 Different concepts and formulas

1. No. of Participants = Total Population – Total Dependents

2. Participation rate = No. of Participants / Total Population *100

3. No. of Dependents = Total Population – No. of Participants

4. Dependency rate = No. of Dependents / Total Population *100

5. No. of Unemployed = Labour force – Work Force

6. Unemployment rate = No. of Unemployed / Labour force *100

7. No. of employed = Labour force – No. of unemployed

8. Employment rate = No. of employed / Labour force *100

Casualisation of workforce
 Casualisation of workforce
It refers to the process where percentage contribution of causal workers in
total workforce goes on increasing over the period of time.
 Casualisation of workforce
It refers to the process where percentage contribution of causal workers in
total workforce goes on increasing over the period of time.
Status 1972-73 1999-2000 2011-12
Self Employed 61.4% 52.6% 52.0%
Regular Salaried Employees 15.4% 14.6% 18.0%
Casual Workers 23.2% 32.8 30.0%
Total 100% 100% 100%
 Casualisation of workforce
It refers to the process where percentage contribution of causal workers in
total workforce goes on increasing over the period of time.
Status 1972-73 1999-2000 2011-12
Self Employed 61.4% 52.6% 52.0%
Regular Salaried Employees 15.4% 14.6% 18.0%
Casual Workers 23.2% 32.8 30.0%
Total 100% 100% 100%

•Percentage contribution of self employed has gone down but still it has been
maximum throughout.
• Contribution of Regular Salaried Employees has been least but it has
marginally increased.
• Percentage contribution of causal workers has increased over the period of
time.
 Causes of Casualisation

1. Limited scope of earning in agricultures has forced farmers to adopt

casual jobs

2. Growth rate of industries has been very limited to absorb rising

labour force.

3. Demand for daily wage earners has been increasing on account of

increasing construction activities.
Informalisation of workforce
 Informalisation of workforce

It refers to the process where percentage of workers in informal sector increases

while in formal sector decreases over the period of time.
 Informalisation of workforce

It refers to the process where percentage of workers in informal sector increases

while in formal sector decreases over the period of time.

In India at present 90% of workforce is engaged in Informal sector and 10% is

engaged in formal sector.

The seriousness of the issue can be better understood if we have the knowledge
of formal and Informal Sector.

Formal Sector: It includes public and private placements which employ 10 or

more than 10 workers. They are entitled for social security benefit

Informal Sector: It includes private establishments which hire less than 10

workers. They are not entitled for social security benefit
 Difference between
Formal worker and Informal worker

Basis Formal Worker Informal Worker

Sector

Social Security

Protection of Interest
 Difference between
Formal worker and Informal worker

Basis Formal Worker Informal Worker

Sector Formal workers work in Formal workers work in
organized sector unorganized sector

Social Security They are entitled for They are not entitled for
social security benefit. social security benefit.

Protection of Interest Their interest is There is no such

protected by trade union association to protect
their interest.
 GDP Growth and Employment Growth

Year 1951-56 1956-61 1961-66 1969-74 1974-79 1980-85 1985-90 1990-92 1997-200 1999-2005 2005-10 2010-12
GDP Growth 3.6 4.2 2.8 3.3 4.8 5.7 5.8 3.4 6.1 6.1 8.7 7.8
Emp Growth 0.39 0.85 2.03 1.99 1.84 1.73 1.89 1.5 0.98 2.28 0.28 1.12

10

9
8.7
8
7.8

6 6.1 6.1
5.7 5.8

5 GDP Growth
4.8
4.2 Employment Growth
4
3.6
3.3 3.4
3
2.8
2.28
2 2.03 1.99 1.84 1.89
1.73
1.5
1 0.98 1.12
0.850000000000001
0.390000000000002 0.28
0
1951-56 1956-61 1961-66 1969-74 1974-79 1980-85 1985-90 1990-92 1997- 1999- 2005-10 2010-12
200 2005
Observation : We can discuss this data in 3 stages
Stage I From 1951 to 1961
•From 1951 to 1961 the gap between growth rate of GDP and Growth rate of employment has been
decreasing which is a good sign. This is primarily because of the focus on labour intensive
technology to generate more employment however in this process GDP seems to be falling.

Stage II From 1961 to 1990

During this stage Green Revolution took place in our country which caused production to
increase significantly therefore GDP also increased while growth rate of employment is
almost stagnant.
Stage III From 1990 onwards
This is the stage of economic reforms where excessive focus has been given on the use of technology
on account of globalization.
•From 1990 onwards the gap between growth rate of GDP and Growth rate of employment has been
consistently increasing.
•This phase is referred to as Jobless growth

Jobless growth refers to the situation where GDP of the country goes on increasing without
corresponding increase in employment opportunities
• The main reason of Jobless growth is the launch of NEW ECONOMIC POLICY where technology
started coming to our country which resulted in increase in GDP without any increase in
employment.
 Policies and Programmes of govt to
Remove Unemployment

Government has started many programmes to overcome the problem of

unemployment in India.

We can discuss these programmes as follows

Note: Explain all self employment and wage employment programmes

Some recent programmes

Make In India (2014)
Skill India Mission (2015)
Start Up India (2016)
 Policies and Programmes of govt to
Remove Unemployment

Make In India (2014):

The aim of this program is to invite foreign companies to setup their production
plan in our country. It will help to generate employment opportunities.

Skill India Mission (2015) :

This program was started in 2015. The objective of this program is develop
technical skills of the people with special focus of women in rural areas so that
they become productive.

Start Up India (2016)

This project was announced on 15th Aug 2015 but launched on in 2016. The aim of
this program was to provide self employment opportunities to people living in
rural area.
 Employment programs

Self Employment Program Wage Employment Program

These are the programs in These are the programs in

which government supports which government is
start ups or any business in generating jobs to provide
by proving various financial or employment to unemployed
non financial help. people.
 Self Employment Program

Swaranjayanti Gram sawrozgar yogna – 1999

This program was started in 1999 with the objective to provide self
employment in rural area.

This program replaced earlier two program know as “Integrated rural

development program” and “training for rural youth for self employment”.

Under this program large number of small enterprises were to be set up in the
rural area to provide self employment opportunities and government
supported these enterprises financially and non financially.
 Self Employment Program
National Rural Livelihood Mission - 2011

This program is also known as Ajivika and was started in 2011 as a

replacement of swaranjayanti gram sawrozgar yojna

By the end of 2012-13 this program had covered 150 district.

By the end of 2013-14 this program had covered another 150 district
By the end of 2014-15 this program covered entire country.

The objective of the program was to provide self employment to rural people.
 Self Employment Program

Sampoorna Gramin Rozgar Yojna 2001

This program was started in 2001 and it replaced earlier two programs. These
were “Jowahar Gram Samridhi Yojna” and “Employment Assurance Scheme”.

The objective of the program was to provide employment to surplus

workforce in rural area and improve their social and economic condition.
 Minimum Wage Employment

Mahatma Gandhi national Rural Employment guarantee act

(MGNREGA)

This is the program which was launched in 2005 which aims to

provide employment for at least 100 days in a year within 5km of
applicants residence.

A person has to get himself registered in near MGNREGA center and

he is given employment within 5km of his residence

Note: Food for work program launched in 1977 was ultimately merged in
MGNREGA
 Minimum Wage Employment
Swaran Jayanti Shehari Rozgar Yojna
This yojna was started in 1997 with the objective of providing
employment to educated urban youth

The total expenditure was to be made on 75:25 basis between

center and state government

Jai Prakash Rozgar Yojna

This yojna was started in 2002 with the objective of providing
employment to unemployed to remote rural area
Occupational Structure
 Occupational Structure

Meaning
Occupational structure refers to the distribution of workers in different
sectors of the economy.
Q. A modest transformation in occupational structure of India only points
to its modest achievement in the area of growth and development. Do
you agree?
Q. A modest transformation in occupational structure of India only points
to its modest achievement in the area of growth and development. Do
you agree?

We agree with the given statement.

If we look at the global data we find that
In all the advanced countries of the world majority of working population is
engaged in secondary sector while very less proportion is engaged in primary
sector.

However in case of less developed economy the situation is just opposite to it.

Shift from primary to secondary sector and to tertiary sector is an indicator of

growth and development of the economy.
 Occupational Structure

Sector 1950-51 2019

Primary Sector 72.7% 42%
Secondary Sector 10.1% 26%
Tertiary Sector 17.2% 32%

This data shows

There has been decline in the contribution of primary sector and increase in the
contribution of secondary sector over the period of time which is indicator of
growth of Indian economy.

However this data also shows that still majority of working population is engaged in
primary sector therefore the rate of growth can be considered as slow and it is still a
refection of backward economy.
Rate of Participation
 Rate of Participation

Sex Rural Urban Total

Male 51.70% 53.00% 52.10%
Women 17.50% 14.20% 16.50%
Total 35.00% 33.90% 34.70%
 Rate of Participation

Sex Rural Urban Total

Male 51.70% 53.00% 52.10%
Women 17.50% 14.20% 16.50%
Total 35.00% 33.90% 34.70%
The above table shows:
Participation rate is only 34.7%. It means very high dependency rate in the country.

Participation rate is high in rural area as compared to urban area. This fact does
mean that contribution of rural economy in GDP is also high. In fact despite high
participation rate contribution of rural economy in total GDP is very less.

In rural area women participation is also high as compared to urban area because
•Poverty compels women do work.
• Education is not priority while employment is. Therefore women ten to work at
early age which also increases participation rate in rural area.
Extra Questions
Q. Why should people work and why should we study about
working people?
Q. Why should people work and why should we study about
working people?

Why should people work?

•A person who works can earn money and ensure not only his survival but
also the survival of his family.
•Work makes person self dependent
•Work helps to contribute in GDP of the country.
Q. Why should people work and why should we study about
working people?

Why should people work?

•A person who works can earn money and ensure not only his survival but
also the survival of his family.
•Work makes person self dependent
•Work helps to contribute in GDP of the country.

Why should we study about working people?

•It helps to understand the occupational structure of the country

•It helps us to understand social and economic problems of the people
•It provides inputs to manpower planning
Q. Unemployment in India is stubborn while in developed countries
it is cyclical in nature. Comment.
Q. Unemployment in India is stubborn while in developed countries
it is cyclical in nature. Comment.

Ans: Unemployment being stubborn in nature means it has been existing

since long and there is no hope in near future to remove unemployment
completely.
In India this problem seems to be stubborn because the rate of increase in
population has been much more than rate of increase in employment . It
is very difficult to fill this gap immediately

Unemployment being cyclical in nature means it arises on and of only. It is

not permanent in nature.
In Advanced economies unemployment is cyclical because it arises on
account of lack of demand which keep fluctuation.
Q. There are several examples in the rural area of India where there
are more workers in the family but gross income of the family is
low. How is this possible?
Q. There are several examples in the rural area of India where there
are more workers in the family but gross income of the family is
low. How is this possible?

Ans: This is typical feature rural families that inspite of more no. of
workers in a family gross income is still low.

This is because these people are engaged in low paid jobs on account of
lack of skills and illiteracy.
Q. Urban unemployment is spill over rural unemployment, do you
agree?
Q. Urban unemployment is spill over rural unemployment, do you
agree?
Ans: Yes we agree with the statement that urban unemployment is
spillover of rural unemployment.
This is because when rural people fail to get employment and basic
facilities in rural area they start moving to urban area in search of
employment and better life style
But in Urban area as well they fail to get employment because of lack of
special skills, illiteracy etc and limited capacity of industries to absorb
surplus labour.
Therefore these people remain poor and unemployed in urban area as
well.
Q. Government is the major formal sector employer in the country. T/F
Q. Government is the major formal sector employer in the country. T/F
Ans: True
Q. Less women are found in regular salaried employment. Do you
agree?
Q. Less women are found in regular salaried employment. Do you
agree?

Ans: The given statement is completely true this is because:

*Regular salaried jobs require skill and considering the literacy rate in
our country, women literacy rate is far less than literacy rate of men.

* Lack of mobility among women in India due to social reason is yet

another cause.

* Because of biological reason women require long maternity leave

which puts pressure on employer as they have to pay salary.
Q. “In recent times the Indian economy has experienced the
problem of casualization of workforce. This problem has only
aggravated by the outbreak of COVID-19.”
Do you agree with the given statement? Discuss any two
disadvantages of casualization of the workforce in the light of the
above statement.
Q. “In recent times the Indian economy has experienced the
problem of casualization of workforce. This problem has only
aggravated by the outbreak of COVID-19.”
Do you agree with the given statement? Discuss any two
disadvantages of casualization of the workforce in the light of the
above statement.

Ans:
The given statement is correct that this pandemic has aggravated the problem of
casualization.

Problems of casualization:
a) Proper labour laws are not formulated for casual workers which make them
insured socially as well as economically.
b) This pandemic has caused increase in their medical expenditure while on the
other hand they have lost work which has made their life very tough.
Q. Urban unemployment is spill over rural unemployment, do you
agree?
Ans: Yes we agree with the statement that urban unemployment is
spillover of rural unemployment.
This is because when rural people fail to get employment and basic
facilities in rural area they start moving to urban area in search of
employment and better life style
But in Urban area as well they fail to get employment because of lack of
special skills, illiteracy etc and limited capacity of industries to absorb
surplus labour.
Therefore these people remain poor and unemployed in urban area as
well.