Causes of Unemployment

Unemployment refers to the situation in which an individual who is able and willing to work at an existing wage rate does not get work. After going through this post, you will be able to understand the actual Causes of Unemployment.

Types of Unemployment in India

Causes of Unemployment

India is severely affected by the ever-rising unemployment rate. The following are the reasons responsible for rising unemployment in India.

Causes of Unemployment #1

Slow economic growth: The low rate of economic growth in India has resulted in a low rate of employment generation. The generated employment opportunities fall short of the supply of labor. Thus, a large section of the labor force remains unemployed.

Further, in order to achieve economic growth, India has looked to use capital-intensive techniques of production (i.e. more machines and technology, less labor) over labor-intensive ones. This has caused many people to lose their jobs and become unemployed.

Causes of Unemployment #2

Rising population: The problem of population explosion is a major concern for India. The population is rising at a much higher rate than the rate of increase in employment opportunities. Education, health, and other basic amenities that go into the creation of quality human capital are severely strained in the face of the rising population. The shortage of these facilities results in the creation of inferior human capital (i.e. unskilled, unhealthy, and illiterate). This, in turn, leads to widespread unemployment.

Causes of Unemployment #3

Seasonal nature of agriculture: Since India is an agrarian economy, a major part of its workforce is employed in the agricultural sector. Agriculture is a seasonal occupation. This causes many farmers to remain unemployed for three to four months in a year between the planting of crops. Besides this, Indian agriculture also suffers from disguised unemployment which acutely hampers the productivity of labor.

Causes of Unemployment #4

Neglect and decline of small-scale industries: The decline of the cottage and small-scale industries in India has left a significant proportion of the population unemployed. The goods produced by small-scale industries face stiff competition from large firms that produce both better quality and cheaper goods. In such a situation, many small-scale industries end up closing operations. As a result, the workers and artisans engaged by them become unemployed.

Causes of Unemployment #5

Lack of infrastructure: Infrastructural inadequacy impedes industrial growth. The low industrial growth rate, in turn, obstructs the generation of employment opportunities in the country.

Causes of Unemployment #6

Staunch traditional and cultural beliefs: To take up a job or not is a matter of individual choice. In India, when it comes to the question of a woman taking up a job, it is usually her family that makes the decision on her behalf. Traditional and cultural beliefs hold sway in our country and these hinder the entry of many able and willing women into the workforce.

Causes of Unemployment #7

Ineffective planning and inadequate information catering system: Dissemination of information regarding various employment generation schemes and plans is adversely affected due to ineffective planning and an inadequate information catering system. Consequently, people remain unemployed due to a lack of awareness.

Causes of Unemployment #8

Low factor mobility: India is a diverse country with different languages, cultures, traditions, and practices. These differences obstruct the migration and mobility of people from one part of the country to another in search of better employment opportunities.

Due to these differences, people prefer to remain unemployed in their places of origin rather than migrate to other regions where jobs are available.

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