INTRODUCTION

The economy of a country is shaped by the availability, quality and mode of use of

resources. Among them, human resources have got a predominant role by virtue of its

complexity. In the modern society employment is a central feature of daily life and the main

source of financial independence, status, prestige, identity and social participation. But due to

the scarcity of sources it becomes difficult for the nation to exploit fully its available human

resources. This results in the problem of unemployment.

Unemployment means that some people are willing to work for their livelihood but

they have no work to do. Increase in unemployment is an indicator of a depressed economy.

It leads to wastage of manpower resource. There is a feeling of hopelessness and despair

among the youth. People do not have enough money to support their family.

India is burdened with so many problems and unemployment problem is one of the

serious problems. We have not been able to solve this problem even after 68 years of our

independence. The number of unemployed youths in our country has already reached an

alarming stage and still the number is increasing every year. The registers of employment

exchanges in India do not, however, give a correct picture of the magnitude of the problem of

the problem of unemployment, because the employment exchanges mainly cover the urban

areas.

In terms of quality of life indicators like literacy, life expectancy and infant mortality

the state of Kerala is ahead not only of the rest of the country but of almost all developing

nations. The failure to create meaningful employment is tragic failure of development in the

state. Unemployment has been a burning problem in Kerala for quite sometimes now. The

economic wellbeing of our state depends on the solution of this problem.

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STATEMENT OF THE PROBLEM

The problem of unemployment is one of the most serious socio-economic problems. The

purpose of this study is to contribute in any meaningful way to the idea of how the growing

rate of unemployment among young people in our society can be reduced at least to

minimum.

IMPORTANCE OF STUDY

Unemployment, undoubtedly, is the most serious form of capability failure in Kerala.

There is a glaring mismatch between people’s expectations arising from educational

qualification and the economy’s ability to provide not just gainful but deserving employment.

A fresh thinking is needed in this direction.

OBJECTIVES

The main aim of the study is to analyze and examine rate of unemployment in the Kerala

economy. The specific objectives are as follows:

 To make an analytical examination of the problem of unemployment in Kerala;

 To study the education – unemployment linkage in the context of Kerala;

 To make a reference on the male and female unemployment in Kerala;

 To suggest suitable measures to moderate the problem of unemployment in Kerala.

SCOPE OF THE STUDY

The study is concentrated on Kerala. The scope of the study is limited to the rate of

unemployment for a period of five years from 2010-2011 to 2014-2015.

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METHODOLOGY

Data have been collected from secondary sources. They were collected by holding

discussions with officials. Secondary data have been collected from internet and other

reports.

TOOLS FOR ANALYSIS

In this project, the tools used are graphs, tables and percentage analysis

SOURCES OF DATA

Secondary data were collected from various sources. They are;

1. Population census:

The census data provide an inventory of human resources of the country

showing their number, characteristics, occupation and distribution among various

branches of economy.

2. National Sample Survey Organization(NSSO):

The NSSO collects data through sample surveys based on scientific technique of

random sampling through household enquiry both in rural and urban areas.

3. Employment Market Information Programme:

This programme covers the organized sectors, which includes all establishments

in the public sector and non agricultural establishments.

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 4. Employment exchange Statistics:

The day to day registration at Employment Exchanges and notifications of

vacancies by the employers generate comprehensive information, which facilitates the

appraisal of organized labor market.

5. Economic censes:

The economic censes gives employment by type of enterprise, distribution or

persons usually working in non-agricultural own account enterprises by states and

rural urban break up etc.

LIMITATIONS OF THE STUDY

 The data collected only for a period of five years and is not enough for making

detailed study

 Secondary data may contain errors as they are not from the direct sources

 Due to time constraints, detailed analysis is not possible

 Several data gaps have crept into the scene making the analysis difficult

 Elaborate study is not possible

CHAPTERISATION

Four chapters are included in this project

 First chapter includes introduction, statement of problem, objectives and importance of

Study, scope of the study, sources of data, methodology, limitations, chapterisation etc.

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 Second chapter deals with theoretical framework about unemployment.

 Third chapter is analysis and interpretation

 Fourth chapter deals with findings, suggestions and conclusion

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KERALA SCENARIO

Kerala’s development achieved major success in human development like minimum

social security, food security, and minimum gender differences in education as well as easy

and affordable access to healthcare. Also significantly Kerala distributed all the achievements

relatively equally across urban rural areas, between man and women and low caste – high

caste populations. In this respect Kerala does better than the rest of India, and some of

developed countries.

Though Kerala has achieved much progress with regards to these, the state has not

been to solve the problem of unemployment to any significant extend during the last 30 years.

Employment opportunities in the state have not increased commensurate with the increased

supply of educated man power.

Unemployment in Kerala is found to be over three times the all India average. In

Kerala unemployment rate is much higher among females as compared to males despite

remarkable women empowerment and poverty alleviation initiatives.

Even though Kerala has made tremendous strides in improving the educational level

of women, unemployment continues to be high among them. Nearly 32.4% of the women had

education up to the level of secondary and above. The figure was 21.6% for the male then.

Investing only in education sector without creating job market placed Kerala among

country of great risk of floating high skills population out of the country. The increasing

unemployment of the educated rises the question if is any point in Government spending

more on investment at economy, agriculture and industrialization.

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UNEMPLOYMENT

Unemployment is the state in which a person is without work, available to work and is

currently seeking work. It is a situation where there is no availability of job for the persons.

It’s a situation in which a person who is physically capable, mentally willing to work at

existing wage rate does not find any job and is forced to remain unemployed.

Unemployment involves serious problems for both the individuals and society as a

whole. For the individuals and society as a whole .For the individual it means loss of income

and in many cases, loss of self respect. For society it results in lost production and in some

cases criminal or other antisocial behavior. Unemployment occurs when people are without

work and actively seeking work. The unemployment rate never falls to zero; instead it

fluctuates around the natural rate of unemployment. The unemployment rate is a measure of

the prevalence of unemployment and it is calculated as a percentage by dividing the number

of unemployed individuals by all individuals currently in the labor force. There remains

considerable theoretical debate regarding the causes, consequences and solutions for

unemployment. There is also disagreement regarding measuring unemployment.

TYPES OF UNEMPLOYMENT

Economist and social thinkers have classified unemployment into various types. Generally

unemployment can be classified in two types:

1. Voluntary unemployment:-

In this type of unemployment a person is out of job of his own desire doesn’t

work on the prevalent or prescribed wages. Either he wants higher wages or doesn’t want to

work at all. Due to rapid social change new values come up and some of the old values

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decline. At the same time people are not in a position to reject the old completely and accept

the new altogether. Here, conflict between the old and the new is the inevitable result which

leads to the social disorganization in imposed situation. In economic terminology this

situations is voluntary unemployment.

2. Involuntary unemployment:-

In this type of situation the person who is unemployed has no say in the matter. It

means that a person is separated from remunerative work and devoid of wages although he is

capable of earning his wages and is also anxious to earn them.

 Rural unemployment:-

This kind of employment prevails in on rural areas. The nature of problem is also

complicated. There are only two types of unemployment commonly found in agricultural

economy.

1. Seasonal unemployment:-

In an agrarian economy like India, seasonal employment is the most

significant type of unemployment in rural sector. Agriculture labor in India is mostly

dependent on monsoon.

2. Disguised unemployment:-

In the rural subsistence agrarian sector of the Indian economy, the problem of

disguised unemployment is also typical. Disguised unemployment refers to that type of

unemployment in which laborers appears to be working and employed but in reality, they are

not employed as they do not add to the total output.

 Urban unemployment:-

This type of unemployment is found in urban areas i.e., towns and cities.

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 1. Industrial unemployment:-

This refers to unemployment amongst workers in industries and factories in

urban areas. Industrial workers may be skilled or unskilled. Industrial is open unemployment.

2. Educated unemployment:-

It is the problem of educated middle class people of urban society. It means

jobless amongst the graduates, post graduates, doctors etc. However this type of

unemployment does not exist in countries worldwide

DETERMINANTS OF UNEMPLOYMENT

1. Influx of females into labor market:-

The influx of women into Kerala's labor force in recent years could have been a

factor underlying increased unemployment rate in the state. Two factors related to this influx

may be pointed out – increasing importance of the service sector and the increased

educational level of women.

2. Ageing as a factor in increasing unemployment:-

Unemployment rates are higher at younger ages than at older ages. If more and

more persons continue to retain their job after ages 50 or 55 years, fewer and fewer

employment opportunities would be open to the younger generation. As employed persons

tend to remain employed for longer periods, unemployed persons remain unemployed for

longer periods too

3. Education as a factor to increase in unemployment:-

Education is an important factor in determining the level of unemployment in

Kerala, as most of the unemployed are educated. Although education alone cannot account

for the entire increase in the unemployment rate, it is definitely an important factor.

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 4. Emigration:-

Emigration has direct as well as indirect effects on unemployment. The direct

effect is through the relatively high rate of emigration from among the unemployed persons

in Kerala. The indirect effect could either reduce unemployment or increase it. Emigration

reduces unemployment through employment creation following the utilization of remittances

sent home by emigrants and the money and expertise brought back by return emigrants.

These effects would reduce unemployment. Through educational expansion and replacement

migration unemployment may increase.

CAUSES OF UNEMPLOYMENT

There is considerable debate among economists as to the causes of unemployment. In

the set of a modern market economy, there are many factors, which contribute to

unemployment. Causes of unemployment are varied and it may be due to the following

factors:-

 There are employment opportunities, but the rising population problem creates the

problem creates the employment. If there is vacancy for 1 position 100 to 1000 apply

for the position and only one gets the job and others remain unemployed.

 People don’t take jobs which are below their grades. Many find it difficult to work at

the below qualifications level job.

 Low wages or salary below the market rate.

 Many big industries look for the skilled candidates and given preference to the

experienced candidates only and not the fresher

 Slow business expansion

 Lack in infrastructure development and poor labor intensive technique planning

 Due to advanced technology only one person can do many people’s work

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  Sometimes even though the candidate is not that qualified but if he gives the bribe he

get the job. The qualified candidate remains unemployed.

 Seasonal nature of work

 Fluctuations in the economy

 People from rural areas have developed a tendency to migrate to the cities for office

jobs. They find little interest in self employment schemes.

BENEFITS OF UNEMPLOYMENT

To an individual employee, unemployment is basically a tragedy that should be

rectified by the government. But for some it can be beneficial as well.

1. Reallocation of resources:-

The main advantage linked to unemployment is the fact that it encourages

unemployed workers to redistribute resources. Usually without any major shakeups,

people continue using resources such as the labor force, in the same manner as they

did some time ago, even though there might be better sectors to employ workers in.

unemployment therefore forces individuals to really examine the way important

resources like time and money are being spent. It enables the redistribution of

employees to various parts within the workforce.

2. Better planning :-

Unemployment promotes better planning in the unemployed workers. Most of

these unemployed workers usually examine their habits of spending to ensure that

they save the most money. For that reason, they may stop paying for both services and

goods that they no long require using such as magazine subscriptions and club

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 memberships. In addition, unemployment causes workers to go back to school for

further studies.

3. Boosts self employment:-

Typically the unemployed individuals opt to create new jobs and begin

working on their own. This action is very useful as it leads to the creation of new

businesses and companies that would otherwise not exist if the creator or owner had

continued working for another person. Enhancing self employment offers a good

economic benefit, especially if it results in the creation of new jobs.

4. Availability of workers:-

Another advantage is that people are available for hire, without being head

hunted away from their existing employers. This permits new and old businesses to

take on staff.

EFFECTS OF UNEMPLOYMENT

Unemployment results in the following problems:-

 Poverty: - Unemployment and poverty goes side by side. The problem of

unemployment gives rise to the problem of poverty.

 Increase in crime rate: - Quite often the unemployed youth commit murder, robbery

etc to earn their living.

 Brain drain: - As a consequence of lack of opportunities in India, intelligent youth

migrate to foreign countries. Their intellectual abilities are used by foreign countries

which causes loss to India.

 Mental health: - Mental health problems like low self confidence, feeling unworthy,

depression and hopelessness. With the lost income and the frustration involved in it,

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 the recently unemployed may develop negative attitudes towards common things in

life and may feel that all sense of purpose is lost. Frequent emotions could be – low

self esteem inadequateness and feeling dejected and hopeless.

 Health diseases: - Due to the problem of unemployment overall tension can increase

dramatically general health issues of individuals.

 Tension at home: - Quarrels and arguments at home front which may lead to tension

and increased numbers of divorces etc.

 Political issues:- Loss of trust in administration and the government which may lead

to political instability

 Insecurity amongst employees: - The prevailing unemployment and the plight of

the unemployed people and their families may create fear and insecurity even in the

currently employed people.

 Social outing: - Unemployment may bring a decrease in social outings and

interactions with other people, including friends.

 Lose of skills’ usage: - The unemployed is not able to put his/her sills to use. And in

a situation where it goes on for too long the person may have to lose some of his/her

skills.

 Lower standard of living: - The people who are employed will suffer a loss of

income and will either have to survive on private savings or on benefits. As a result,

they will be able to buy fewer goods and services and will see a fall in their standard

of living.

 Higher training costs: - As we have seen, many firms will benefit from lower wage

costs as a result of unemployment. However, many firms may also have to spend

more resources on training new employees because they have been out of work for so

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 long. Training new employees’ uses up a firm’s time and resources and as a result

most firms will increase in employment costs.

 Fewer tax revenues: - Because of fewer people are working, there will be fewer

people earning enough income to pay tax. As a result, the Government will receive

less tax revenue and this will have a large impact on the Government’s finances.

 If unemployment continues to rise, many companies lose precious workers, and this

may result in the company shutting down.

 Increase in demand for inferior goods: - When unemployment increases in an

economy more people start buying inferior goods because they have lower incomes.

 To get rid of unemployment stress, people accept alcohol or drugs

 People accept suicide as the last option of their life.

 Lower economic growth.

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 Total population in Kerala
Table No. : 4.1
Table showing total population in Kerala

Year Population Percentage growth (%)

2012 33,388,000 100

2013 33,551,601 100.49

2014 33,715,202 100.98

2015 33,878,803 101.47

2016 34,040,350 101.96

Graph No. : A4.1

Graph showing total population in Kerala

102.5

102

101.5
P0PULATION RATE

101

100.5

100

99.5

99
2012 2013 2014 2015 2016
YEAR

Interpretation:

Here we can see that the population in 2012 is 100 and that of in 2016 is 101.96. The

population is increasing year by year. From this we can conclude that the population rate

shows an increasing rate and it will ever show a decreasing trend.

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 Male unemployment rate
Table No. : 4.2
Table showing male unemployment rate

Percentage
Year Male
growth (%)
2012 794711 100

2013 1800057 226.50

2014 2280970 286.01

2015 2267971 285.38

2016 2280890 287

Graph No. : A4.2

Graph showing male unemployment rate

286.01 285.38 287

300

250
UNEMPLOYMENT RATE

226.5

200

150

100
100

50

0
2012 2013 2014 2015 2016
YEAR

Interpretation:

It depicts that unemployment is less in number in 2012. From 2013 onwards

unemployment rate tends to increase. The last year 2016 shows an increasing unemployment

rate of 287%.

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 Female unemployment rate
Table No. : 4.3
Table showing female unemployment rate

Percentage
Year Female
growth (%)
2012 2289238 100

2013 2789415 121.85

2014 2842571 124.17

2015 2928154 127.9

2016 2988565 130.55

Graph No. : A4.3

Graph showing female unemployment rate

140 127.9 130.55

121.85 124.17
120
100
UNEMPLOYMENT RATE

100

80

60

40

20

0
2012 2013 2014 2015 2016
YEAR

Interpretation:

It concludes that the unemployment rate of female shows an increasing trend from

2012 to 2016 from 100% to 130.55% respectively.

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 Comparison between educated people and educated unemployed
Table No. : 4.4

Table showing comparison between educated people and educated unemployed

Percentage Educated Percentage

Year Educated people
growth (%) unemployed growth (%)
2012 31151004 100 3083949 9.90

2013 31471402 101.02 4589472 14.58

2014 32096875 103.07 5123541 15.96

2015 32455153 104.19 5196125 16.01

2016 33186257 106.53 5269455 16

Graph No. : A4.4

Graph showing comparison between educated people and educated unemployed

EDUCATED UNEMPLOYED EDUCATED PEOPLE

120 106.53
100 101.02 103.07 104.19
EDUCATED PEOPLE

100

80

60

40
15.96 16.01 16
20 9.9 14.58

0
2012 2013 2014 2015 2016
YEAR

Interpretation:

It reveals that the educated unemployed people in our Kerala are increasing year by

year. But there is a slight decrease from 16.01% to 16% in the year 2016.

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 Unemployment rates by age
Table No. : 4.5
Table showing unemployment rate by age

Unemployment rate in 2016

Age
(%)
15 – 19 60.75
20 – 24 53.50
25 – 29 40.25
30 – 34 21.90
35 – 39 17.47
40 – 44 8.55
45 – 49 5.20
50 – 54 4.30
55 – 59 3.35

Graph No.: 4.5

Graph showing unemployment rate by age

70

60 60.75
53.5
UNEMPLOYMENT %

50
40.25
40

30
21.9
20 17.47

10 8.55 5.2 4.3 3.35

0
15 – 19 20 – 24 25 – 29 30 – 34 35 – 39 40 – 44 45 – 49 50 – 54 55 – 59
AGE

Interpretation:

It reveals that the unemployment rate varies considerably by age. From the age of 15

to 29, the unemployment rate is 60.75% to 40.25% respectively. The interpretation is that, at

higher ages the rates are lower among the people and at lower ages the rates are higher.

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 Comparative state-wise unemployment rate
Table No.: 4.6
Table showing comparative state – wise unemployment rate

Unemployment rate in Unemployment rate in

Sl. No. Name of the state
the year 2014 – 15 (%) the year 2015 – 2016 (%)
1. Andhra Pradesh 2.5 3.5
2. Arunachal Pradesh 13.0 14.0
3. Assam 6.5 6.4
4. Bihar 6.0 7.0
5. Chhattisgarh 1.4 4.2
6. Delhi 5.7 5.2
7. Goa 10.7 10.6
8. Gujarat 2.7 1.2
9. Haryana 4.8 4.8
10. Himachal Pradesh 6.3 7.5
11. Jammu & Kashmir 8.8 10.5
12. Jharkhand 8.7 7.4
13. Karnataka 2.0 1.8
14. Kerala 10.4 11.8
15. Madhya Pradesh 2.2 2.9
16. Maharashtra 3.6 2.8
17. Manipur 3.2 7.8
18. Meghalaya 4.6 4.8
19. Mizoram 2.9 3.8
20. Nagaland 7.3 9.4
21. Orissa 5.6 6.0
22. Punjab 4.8 5.8
23. Rajasthan 3.2 6.5
24. Sikkim 13.6 15.8
25. Tamil Nadu 3.8 3.6
26. Telangana 3.3 3.3
27. Tripura 12.6 11.6
28. Uttarakhand 5.7 8.0
29. Uttar Pradesh 6.1 6.3
30. West Bengal 7.4 5.2

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Graph No. : A4.6
Graph showing comparative state – wise unemployment rate

West Bengal
Uttar Pradesh
Uttarakhand
Tripura
Telangana
Tamil Nadu
Sikkim
Rajasthan
Punjab
Orissa
Nagaland
Mizoram
Meghalaya
Manipur
STATES

Maharashtra UNEMPLOYMENT RATE IN THE

Madhya Pradesh YEAR 2015 – 2016 (%)
Kerala UNEMPLOYMENT RATE IN THE
YEAR 2014 – 15 (%)
Karnataka
Jharkhand
Jammu & Kashmir
Himachal Pradesh
Haryana
Gujarat
Goa
Delhi
Chhattisgarh
Bihar
Assam
Arunachal Pradesh
Andhra Pradesh

0 5 10 15 20
UNEMPLOYMENT RATE

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Interpretation:

Gujarat had lowest unemployment rate in the country last fiscal while Sikkim had the

highest. Unemployment rate shows lowest in Gujarat at 1.2, followed by Karnataka

at 1.8, Maharashtra at 2.8, UT Chandigarh at 2.8, Madhya Pradesh at 2.9 and Telangana at

[Link], the maximum unemployment was found in Sikkim at 15.8 persons, followed by

Arunachal Pradesh at 14.0, Kerala at 11.8, Tripura at 11.6 and Goa at 10.6, as per survey

report. Kerala has third position in unemployment rate when comparison is made between

states in India. Hence this table reveals that, unemployment is increasing year by year and it

becomes a major problem to the state Kerala.

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 Unemployment rate in rural and urban areas
Table No. : 4.7
Table showing unemployment rate in rural and urban areas

Rural Male 13.0

unemployment
rate Female 29.3

Urban Male 8.9

unemployment
rate Female 22.0

Graph No. : A4.7

Graph showing unemployment rate in rural and urban areas

Unemployment Rate
Male - Rural Female - Rural Male - Urban Female - Urban

18%
30%

12%
40%

Interpretation:

It shows that 40% of rural women are unemployed whereas in urban area it is only up

to 30%. In case of rural male it is 18% which is less than female. Compared to all the less

percentage can be seen in urban male.

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FINDINGS

 The number of woman who had attained education has been remarkable in Kerala

approximately 32.4%

 Education level of men less in number when compared to women approximately

21.6%

 Out of the total unemployed 5269455 in the state, 2988565 are women.

Unemployment today is largely a problem among women.

 Unemployed in urban areas is more than urban areas.

 The population of Kerala is increasing year by year even day by day. This is one of

the major cause for unemployment

 The labor force participation rates in Kerala are reduced by high level of

unemployment through a discouraged worker effect, especially for women

 A rate of unemployment discourages people who search for jobs through a rise in the

job search costs. A high job search costs eventually push people out of the labor force as

they stop looking for jobs.

 Unemployment rate among women is high. Even after long waiting periods, majority

of young women remain unemployed. Hence they cease to be job seekers; they are

classified as to be out of the labor force by official surveys.

 Because of the lack of employment opportunities that match the educational

achievements of a job seeker, is a noted reason for the unemployment in Kerala. A large

proportion of unemployed persons in Kerala are educated

 Industrial backwardness of the state, together with the limited scope for absorption of

more workers in agriculture and the considerable dependence on salaried employment

has led to large scale and growing unemployment in Kerala

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 Educated women in rural areas register substantially high rate of unemployment than

their counterparts in urban areas. But the trend is opposite in the case of general

employment where urban women register a higher unemployment rate than rural women.

This shows the difference in the nature of jobs available to and preferred by educated

and uneducated women.

 People of Kerala have an inclination to migrate to other countries in search of jobs.

Kerala has the highest proportion of population working outside the country because of

the access to the increased number of jobs available abroad.

 A detailed analysis of unemployed shows that the probability to become an

unemployed within labor force is higher among younger age people than elder.

 More than 70% of the unemployed have an education of secondary and above.

 The incidence of overall unemployment in Kerala is over 4 times the national average.

Even though the Kerala has the highest literacy rate and growing GDP, in case of

employment Kerala cannot achieve a higher position. Kerala positioned 3rd rank in case

of highest unemployment rate while comparing with other states in India.

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SUGGESTIONS

In the light of the analytical study the following suggestions are offered.

 The very first solution for the unemployment is to control the rising population of our

state. Government should motivate people to have small families

 The quality of education in Kerala should be improved. Government should select a

committee to look after the schools and universities. The syllabus taught is of no use to

the industries so the education should be as per the current requirements of the

industries. Before completing the education a practical knowledge should be given.

 Government should encourage and develop the agriculture based industries in rural

areas so that the rural candidates don’t migrate to the urban areas.

 More employment opportunities should be generated in rural areas for the seasonal

employment people.

 Rapid industrialization should be created

 Village and cottage industries should be developed

 Loan facilities should be extended among the unemployed youth so that they may set

up small industries.

 Government support to struggling industries in order to try to save jobs. E.g. airline

industry

 Make more information available in job centers.

 Unemployment agencies could tighten their job search and job acceptance

requirements.

 State must focus on achieving a human development instead of merely harping on

human resource development by shifting the emphasis from instrumental to intrinsic role

of education.

26
 The topic “A STUDY ON UEMPLOYMENT IN KERALA” addressing the issue of

mismatch between the demand and supply of labour at all levels of skills ad across all sectors

and enhancing employability should be given top priority by the Government. This will help

the labour force to find the suitable jobs in the country. For increasing the economic

participation of women, flexible job opportunities should be created. Kerala could be a

knowledge hub for the country where educated labour is provided high quality work

opportunities, which challenge them to not only, earn well but to explore their full potential.

27
CONCLUSION

These results point to an important conclusion about the unemployment situation in

Kerala. Unemployment is a social scourge. It is wasteful and impoverishing and generates

discontent frustration and resentment. Ultimately, if it not checked and reversed, it can lead to

the disintegration or destruction of the society itself.

28