Question

Establish the difference between open unemployment and disguised unemployment.

Hint:

To contrast types of unemployment, focus on whether jobs are unavailable or just inefficiently distributed across sectors or regions.

Answer 1

Open Unemployment:
1. It occurs when people who are willing and able to work, but cannot find a job. It is a direct form of unemployment where there is a visible absence of work.
2. It is common in urban areas, especially for educated workers who fail to find employment.
3. There is a clear match between the working population and the available jobs in an economy.
4. Example: A graduate unable to find a job in a city due to a lack of opportunities in their field.
Disguised Unemployment:
1. This type of unemployment occurs when more people are working than are actually required for a given task, leading to a surplus of labor with no increase in output.
2. It is common in rural areas, particularly in agricultural work where more people are employed than necessary.
3. It does not lead to a visible increase in unemployment but results in inefficiency and wastage of labor.
4. Example: In rural areas, many workers in a field may be doing the same work, but their additional labor does not contribute to extra output.
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