Introduction

Unemployment is a term referring to individuals who are employable and actively

seeking a job but are unable to find a job. Included in this group are those people in the
workforce who are working but do not have an appropriate job. Usually measured by the
unemployment rate, which is dividing the number of unemployed people by the total
number of people in the workforce, unemployment serves as one of the indicators of a
country’s economic status.

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Types of unemployment
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Reasons of unemployment
1. Caste System:
In India caste system is prevalent. The work is prohibited for specific castes in some
areas.

In many cases, the work is not given to the deserving candidates but given to the
person belonging to a particular community. So this gives rise to unemployment.

2. Slow Economic Growth

Indian economy is underdeveloped and role of economic growth is very
slow. This slow growth fails to provide enough unemployment
opportunities to the increasing population.

3. Agriculture is a Seasonal Occupation:

Agriculture is underdeveloped in India. It provides seasonal employment. Large part
of population is dependent on agriculture. But agriculture being seasonal provides
work for a few months. So this gives rise to unemployment.
 4. Joint Family System:
In big families having big business, many such persons will be available who do not
do any work and depend on the joint income of the family. Many of them seem to be
working but they do not add anything to production. So they encourage disguised
unemployment.

5. Slow Growth of Industrialisation:

The rate of industrial growth is slow. Though emphasis is laid on industrialisation,
yet the avenues of employment created by industrialisation are very few.

6. Defecting Education system:

The prevailing education system in India is full of defects. The number of

engineering, management and other institution provides numerous engineers,
MBA’s, etc. But due to lack technical and vocational training, such educated people
are unable to meet the requirement of the firm and remain unemployed.

7. Immobility of labour:
Mobility of labour in India is low. Due to attachment to the family, people do not go
to far off areas for jobs. Factors like language, religion, and climate are also
responsible for low mobility. Immobility of labour adds to unemployment.

8. Inadequate Irrigation Facilities:

Even after the completion of 9th five plans, 39% of total cultivable area could get
irrigation facilities.

Due to lack of irrigation, large area of land can grow only one crop in a year. Farmers
remain unemployed for most time of the year.

9. Fall of Cottage and Small industries:

The industrial development had adverse effect on cottage and small industries. The
production of cottage industries began to fall, and many artisans became
unemployed.

Effects of unemployment on an individual

Unemployed individuals are susceptible to experiencing several challenges.
These challenges are exacerbated the longer a person is unemployed.
Common disadvantages of unemployment for individuals include:
Reduced income
Unemployed individuals experience reduced income as a direct result of not having a job.
Because a job provides wages for the person, being unemployed takes away these wages
and leaves the individual with less available income.
People who are unemployed and do not have any other source of income often rely on
their savings or borrowed money to fund essential costs such as food and living expenses.
Unemployed individuals who are the primary worker in the family face even more difficulty,
as they must come up with the money to account for not only their own needs but for the
needs of their family members.

Health problems
Unemployment can also have a significant impact on a person's physical health. Being
unemployed is a highly stressful situation, so it may cause stress-related health issues
such as headaches, high blood pressure, diabetes, heart disease, back pain and
insomnia.

Many people rely on their jobs to provide health insurance, so when a person is
unemployed, they likely do not have access to health care. Unemployment can also
increase a person's risk of further declined health, as they often skip health-related
appointments to reduce costs.

Unemployed people are also less likely to spend money on health-related expenditures
such as a gym membership or healthy food. By skipping out on these preventative
measures, individuals increase their risk of a decline in physical health.

Effects of unemployment on society

The impact of unemployment also reaches out to the community and society in which the unemployed
person lives. While one unemployed person will typically not have a significant impact on society, high
unemployment rates in certain areas often lead to higher poverty rates and poorer neighbourhoods that
amplify the societal impact of unemployment.

Communities with high unemployment rates are more likely to have limited employment opportunities,
low-quality housing, fewer available recreational activities, limited access to public transportation and
public services and underfunded schools.

Effects of unemployment on the economy

Unemployment directly impacts the economy as a whole. When people are unemployed, they
spend less money, which ultimately contributes to less contribution to the economy in relation to
services or goods sold and produced.

Unemployed persons also experience a reduced purchasing power which can leave other individuals who
create products that were purchased by these individuals without jobs as well.

Unemployed individuals consume much less than those who are employed, so a higher unemployment
rate can leave the economy lacking in terms of products sold. This can leave organizations with
decreased revenue.
Long term vs short term unemployment
Long term unemployment
Unemployment that lasts longer than 27 weeks even if the individual has sought
employment in the last four weeks is called long-term unemployment. Its effects are far
worse than short-term unemployment for obvious reasons, and the following are noted
as some of its effects.

 Some 56% of the long-term unemployed reported a significant decrease in their

net worth.
 Financial problems are not the only effects of long-term unemployment as 46% of
those in such a state reported experiencing strained family relationships. The
figure is relatively higher than the 39% percent who weren’t unemployed for as
long.
 Another 43% of the long-term unemployed reported a significant effect on their
ability to achieve their career goals.
 Sadly, long-term unemployment led to 38% of these individuals losing their self-
respect and 24% seeking professional help.

Short term unemployment

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Unemployment Rate
The unemployment rate is the percent of the labor force that is jobless. It is a lagging indicator,
meaning that it generally rises or falls in the wake of changing economic conditions, rather than
anticipating them. When the economy is in poor shape and jobs are scarce, the unemployment
rate can be expected to rise. When the economy is growing at a healthy rate and jobs are
relatively plentiful, it can be expected to fall.

We can calculate the unemployment rate by dividing the number of unemployed people by the total
number in the labor force, then multiplying by 100.
Impact of COVID-19 on unemployment

(The second wave of the pandemic has

already hit the gig economy and many migrant workers are again heading back to their native places)
COVID 19 pandemic in India has very severely impacted, rather negatively, the
employment figures of India since early 2020. due to this COVID-19 pandemic
lockdown, there had been a devastating effect on the unemployment rate in India as most
of the private companies have fired their employees. The main sufferers of this lockdown
are the informal sector employees as the majority of them started losing jobs since
construction works were closed. With no capital, thousands of people deserted cities,
marching to their homelands for several hundreds of miles away in the absence of
government transportation, which showed their intensity of anguish.

In January 2021, India saw an unemployment rate of over six percent. This was a significant
improvement from the previous month. A damaging impact on an economy as large as India’s caused
due a total lockdown was imminent. Unemployment went up to nearly 24 percent in April 2020. This was
possibly a result of a decrease in demand as well as the disruption of workforce faced by companies.

Between February and April 2020, the share of households that experienced a fall in income shot up to
nearly 46 percent. Inflation rates on goods and services including food products and fuel were expected
to rise later this year. Social distancing resulted in the job losses, specifically those Indian society’s lower
economic strata. Several households terminated domestic help services – essentially an unorganized
monthly-paying job. Most Indians spent a large amount of time engaging in household chores
themselves, making it the most widely practiced lockdown activity.

Impact of unemployment on economic growth

Unemployment is a big problem which effects the economic growth of the country. It
has following bad effects:
(i) Exploitation of labour:
 Due to unemployment labourers are exploited. They have to accept low
wages and work under un-favourable conditions.
(ii) Industrial disputes:
Industrial disputes arise because of unemployment. It has adverse effects
on employer-employee relations. Due to industrial disputes, the
unemployment rises.
(iii) Political instability::
There is political instability in the country due to unemployment.
Unemployed persons engage themselves in destructive activities. They
consider Govts, worthless. Economic development becomes difficult
under conditions of political instability.
(iv) Social problem:
Many social evils like dishonesty, gambling and immorality etc. arise due
to unemployment. It endangers law and order situation of the country. It
causes social disruption in the society.
(v) Increase in poverty:
Under the situation of unemployment a man has no source of income.
Unemployment causes poverty. Burden of debt increases. Economic
problems increase.
(vi) Loss of human resources:
Due to unemployment, human resources go waste. No constructive use of
labour force is made. If human resources are properly used, economic
growth of the country will increase.

Government initiactives for unemployment in

India
1 Integrated Rural Development Programme (IRDP)

The Government of India introduced IRDP in 1978-79, intending to create full employment

opportunities in the rural areas. This program included agriculture, forests, fisheries, animal
husbandry, cottage industries, construction of canals, roads, and so on. To provide employment, a
sum of INR 312 crores was also spent in the Seventh plan, which benefited 182 families.
 2. Training for Self–Employment:

The program was launched on August 15th, 1979, and is called the National Scheme of Training of
Rural Youth for Self Employment (TRYSEM). Its main objective is to reduce unemployment
among the youth. Under this, during the seventh plan, around 11.6 lakh youth given training, which
gave young men financial assistance from banks, which varies from INR 3000 to INR 5000 to start
any work.

Composite Rural Training and Technical Centres were set up to give training to 2.8 lakh rural
youth during 1995-96.

 3. Jawahar Rozgar Yojana:

This started on April 28th, 1989, intending to employ one member of every rural family. The job is
provided for around 50 to 100 days per year at a workplace, which is nearby the place of residence.
30% of the employment generated is reserved for women. The Central Government has the duty to
finance around 80% of the program, which reduces the burden of the state government to only
20%. National Rural Landless Employment Guarantee Programmes were merged with the Jawahar
Rozgar Yojana in the year 1989.

 4. Nehru Rozgar Yojana (NRY):

The Yojana was started in the year 1989 and included three schemes under itself :
a) The first scheme provides a subsidy to urban poor so that they can set up micro-enterprises.
Under this program, in the year 1995, 1.25 lakh families were benefitted.

b) The second scheme ensures arrangements for wage-employment to laborers in the cities with
less than 10 lakh population is by the means of providing Indian Economic Development and
Elementary Static facilities. In the year 1995, under this scheme, 93 lakhs days of employment
have been provided. 

c) The third scheme provides urban poor with employment opportunities like house repairing, etc. 

 5. The Swaran Jayanti Rozgar Yojana:

The plan, which started on 1st December, is meant for providing employment to unemployed in
urban areas. It aims at providing self or wage employment to unemployed youth of urban areas. It
works upon two plans: 

a) Urban Self- Employment Programme

b) Urban Wage Employment Programme

75% of the expenditure is incurred by the Central Government, and the rest is upon state
governments. A sum of INR 125 crore was spent upon this during 1997-98. 

Unemployment across the world

Highest Unemployment Rates
The world's top four highest unemployment rates at the end of 2020 were in Sub-Saharan Africa
and occupied Palestine.

 South Africa: 28.5%

 Occupied Palestinian Territories: 26.1%
 Lesotho: 22.8%
 Eswatini: 22%5

South Africa had one of the highest unemployment rates in the world in 2020. It's also the richest
countries in this grouping. The World Bank estimated its gross domestic product (GDP) per
capita to be $6,001.4 in 2019

The Palestinian territories are currently facing an unsustainable economic situation. 2020 was a
particularly difficult year, as the the Palestinian economy has continued to feel the impact of both
the economic fallout of the COVID-19 outbreak and a political standoff that made it difficult for the
Palestinian Authority to collect tax revenue
Eswatini suffers from extreme poverty and the world's highest HIV/AIDS prevalence rate,
according to the CIA.
HIV/AIDS tends to cause a substantial decline in productivity as households lose manpower to
the disease.
Lowest Unemployment Rates
Below are the world's 10 lowest unemployment rates at the end of 2020:

 Qatar: 0.1%
 Solomon Islands: 0.5%
 Niger: 0.5%
 Lao People's Democratic Republic: 0.6%
 Cambodia: 0.7%
 Bahrain: 0.8%
 Thailand: 0.8%
The above countries have stunning unemployment rates—from 0.1% to 1.4%—and all bested the
U.S. by a considerable margin at the end of 2020
Unemployment Rates for the World's Largest Economies
The unemployment rates for the top 10 largest economies by GDP were predictably low at the end
of 2020, with some outliers like France, Italy, and Brazil.5 1

 Japan: 2.3%
 Germany: 3%
 United States: 3.9%
 United Kingdom: 4.1%
 China: 4.4%
 India: 5.4%
 Canada: 5.4%
 France: 8.3%
 Italy: 9.8%
 Brazil: 12%5 1

The figures above will likely look considerably different in the coming months, as countries
reopen their economies and the number of daily COVID-19 cases continues to generally trend
downward.1 2 The impact on unemployment rates will vary based on the accessibility of the
vaccine, how quickly populations are able to achieve herd immunity, how soon businesses are
able to resume operating at full capacity.

Solutions to unemployment crisis in India:

1. Education 
For every problem in the world, Education stands as the strongest solution. Education
is the basic right of any citizen and it should be provided with minimum fees. Right
from equal educational facilities, to skill-based and computer knowledge, the
Education system can and should be improved. 

2. Career guidance 
Job seekers who are educated but could not figure the right career path should consult
a career guidance expert. Every industry has numerous career opportunities but Indian
workers lack complete awareness about the same. A career guidance expert can help
job seekers understand the industry know-how, zero down on the best career option
and choose the right career path for them.
3. Skill-based training 
Every job role requires a specific skill set and every job seeker should get trained in
those skills. Many EdTech startups provide career guidance with industry, job or
company-specific training to hone organizational skills. These skills training
sessions also include resume building training, interview preparations through mock
interviews and everything that can help job seekers become employable.
4. Job referrals 
Many job seekers fail to find the right place to work. Job referrals in top
companies can help job seekers prepare and crack interviews accordingly. To eradicate
unemployment, it is important for job seekers to find the right company and get placed
with a deserved salary. This will minimize the frictional unemployment crisis in India. 
Unemployment can also be eradicated if every fresher graduate is given an opportunity
to work in the companies. Additionally, if job seekers receive the right career
guidance, get trained and employable, then every top company would want to hire
them. Education, career guidance, skill-based training can together solve the
unemployment crisis in India