UNEMPLOYMENT IN INDIA

WHAT IS UNEMPLOYMENT

Unemployment is a situation where a person is part of the labour force, is able to work, is willing to work, and is actively looking for work, but does not get work. A person who is not looking for work at all, such as a student or a retired person, is not counted as unemployed. Such a person is treated as being outside the labour force.

The labour force means the total number of people who are working plus the people who are looking for work. The unemployment rate is the percentage of unemployed persons in the total labour force.

Key terms used by NSO and PLFS

Term	Meaning
Labour Force Participation Rate (LFPR)	Percentage of population that is working or seeking work
Worker Population Ratio (WPR)	Percentage of population that is actually employed
Unemployment Rate (UR)	Percentage of unemployed persons in the labour force

Components of Unemployment

The population of any country consists of two components

1. Labor Force

2.Non-Labor Force.

 

1. Labor Force

• Labor force means all persons who are working (i.e. being engaged in the economic activity) as well as those who are not working but are seeking or available for work at the current wage rate. It means the labor force consists of both employed and unemployed people.

2.Non-Labor Force.

• The component of population which is not a part of the labor force is Non-Labor Force. It includes all those who are not working and are neither seeking nor available for work.

Unemployment can be defined as a state of workless ness for a person who is fit and willing to work at the current wage rate. It is a condition of involuntary and not voluntary idleness. Simply stated an unemployed person is the one who is an active member of the labor force and is seeking work, but is unable to find the same. In case of voluntary unemployment, a person is out of job on his own accord or choice, doesn’t work on the prevalent or prescribed wages. Either he wants higher wages or doesn’t want to work at all. The involuntary unemployment on the other hand is the situation when 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. It is the involuntary idleness that constitutes unemployment.