Urban 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. There are two types of Unemployment in India – rural unemployment and urban unemployment.

Types of Unemployment in India

Types of Urban Unemployment


Unemployment in urban areas can be divided into two broad categories- industrial unemployment and educated unemployment.


Types of Urban Unemployment #1


Industrial unemployment

This type of unemployment refers to the situation in which individuals are willing to work in the manufacturing sector, but are unable to find a suitable job due to a lack of education or technical skills. The following are the factors responsible for industrial unemployment in India.

Rural-urban migration: Very often, people in rural areas who are unable to find gainful employment in the agricultural sector tend to migrate to urban areas in search of better job opportunities. However, the industrial sector fails to absorb such a growing workforce. In such a situation, most migrants either remain unemployed or resort to working in the informal sector.
Adoption of labor-saving techniques of production: Increasingly, modern industries are switching over from labor-intensive techniques of production to labor-saving ones. This implies the use of more machinery and less labor for the production of goods and services. As a result, employment opportunities remain low in the industries.


Types of Urban Unemployment #2


Educated unemployment

This type of unemployment refers to the situation in which educated people are unable to find jobs. In India, the number of educated unemployed has substantially increased.

Clearly, employment opportunities have not increased at the same rate as the increase in the number of educated persons. The prime reason for the rise of educated unemployment is that the Indian education system is not job-oriented. It fails to provide the kind of practical knowledge and skills that are actually required in jobs. As a result, a large number of educated persons either remain unemployed or are engaged in jobs that are not suitable as per their qualifications.


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