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. It is unemployment that does not affect aggregate output. When more people are engaged in some activity than the number of person requiredfor that , this is called disguised unemployment . For example : An agricultural field require 4 labourers but people engaged in this activity is 6then this unemployment for 2 labours is called disguised unemployment
Unemployment that does not affect aggregate
output. 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.
Disguised unemployment exists frequently in
developing countries whose large populations create a surplus in the labor
force. Where more people are working than is necessary, the overall
productivity of each individual drops. Disguised unemployment is characterized
by low productivity and frequently accompanies informal labor markets and
agricultural labor markets, which can absorb substantial quantities of labor.
This is when people do not
have productive full-time employment, but are not counted in the official
unemployment statistics. This may include:
- People on sickness / disability benefits (but,
would be able to do some jobs)
- People doing part-time work.
- People forced to take early retirement and
redundancy
- Disguised unemployment could also include people
doing jobs that are completely unproductive, i.e. they get paid but they
don’t have a job. In a developing economy like