Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labour force.

Features of Unemployment in India

For many of us the notion of unemployment is one of those who do not have a job or, are paid no salary. This is partly correct but not wholly. Such a notion would apply largely to the educated people who are not able to find work or to those in urban areas who come to seek employment. We will leave out a large section of people, in fact the majority, who are engaged in agriculture and who may not be paid wages. For example, a person cultivating a small piece of land which he owns is also employed; through he is not paid a wage. He is more known as self-employed in agriculture. Similarly there are vast numbers of people in rural and urban area who do not get wages for the work they do. These are farmers, artisans, petty shop owners, small and big industrialists, taxi drivers, mechanics etc. These people are also regarded as being employed.

All these people as well as those drawing salaries are regarded as being “gainfully employed” because they get some material rewards (in cash or kind) for the work they do. Those who are not gainfully employed are unemployed. The next problem is of identifying the unemployed. This is not an easy task. Normally in our country we regard those people who are between the ages 15 and 58 as being “economically active”. In other words these people have the potential of being gainfully employed. Therefore those who are not gainfully employed in this age group are unemployed. This supposition will again not be fully correct. There could be a large number of people in this age group who do not wish to seek employment. They could be students or people who can depend on other people's earnings and they do not wish to be employed.

Till recently women were considered in this category since a large section of women (married women mainly) do household work. However, in recent years, this has been considered economic activities. The Census of 1991 and 2001 has taken this into consideration.

Types of Unemployment in India

So, we can see unemployment is a serious problem which is not always easy to identify. Let us discuss the different types of unemployment in India.