Disguised unemployment is said to occur when:

The correct answer is More labour is engaged in an occupation than optimally required.

Key Points

UNEMPLOYMENT

• A condition where a person eligible to work and looking for it is not able to find work.
• An individual on the basis of his activity status can be categorized into the following: Employed, Unemployed, and Neither working nor looking for work.
• The first two categories constitute the total labor force.
• The unemployment rate can be calculated using the below formula: Unemployment rate = (Unemployed workers/Total labour force) x 100
• Following are the types of unemployment
  • Disguised Unemployment - More labor is engaged in an occupation than optimally required and is usually seen in the agriculture sector.
  • Seasonal Unemployment - It occurs when a worker is unable to find work during a particular season and this also is seen in the agriculture sector.
  • Structural Unemployment - It occurs when workers do not have skills according to the jobs available in the market. -
  • Cyclical Unemployment - It occurs during the recessions in the business cycle.  
  • Technological Unemployment - It occurs due to changes/advancements in technology.
  • Frictional/Search Unemployment - It occurs when there a time lag between the jobs when an individual is searching for a new job or is switching between the jobs.
  • Vulnerable Unemployment - It occurs when workers do not have proper job contracts and legal protection. Since their work record is not maintained, they are considered unemployed.

Additional Information

• The National Sample Survey Office (NSSO) uses the following approaches to measure unemployment in India:
  • Usual Status Approach
  • Weekly Status Approach
  • Daily Status Approach