Question

Explain `Disguised Unemployment' with example.

Hint:

Remember: \[ \boxed{\text{Disguised Unemployment} = \text{Hidden Unemployment}} \] Common example: \[ \boxed{\text{Too many family members working on a small farm}} \]

Answer 1

Step 1: Meaning of disguised unemployment.
Disguised unemployment is a situation in which more people are engaged in a work than actually required. In this type of unemployment, some workers appear to be employed, but their contribution to total output is almost zero. If these extra workers are removed from the work, the total production does not decrease.

Step 2: Where it is commonly found.
Disguised unemployment is mostly found in the agricultural sector, especially in rural areas. In many families, all members work on the same small piece of land even though only a few workers are actually needed for cultivation.

Step 3: Example.
Suppose a farmer's field requires only three workers for cultivation, but five family members are working on it. The extra two workers do not increase the production of the field. If those two workers are shifted to some other productive work, the output of the field will remain the same. This situation is called disguised unemployment.

Step 4: Why it is a problem.
Disguised unemployment leads to underutilisation of labour. People remain busy but do not contribute effectively to production. It also keeps income low and increases pressure on agricultural land.

Step 5: Final conclusion.
Thus, disguised unemployment means hidden unemployment, where people seem to be employed but their marginal contribution to production is zero. \[ \boxed{\text{Disguised unemployment = More workers than actually required}} \] Disguised unemployment is a situation where more people are engaged in work than needed, and removing some workers does not reduce total output. For example, if five people work on a field where only three are required, two are disguisedly unemployed.