disguised unemployment
Quick Summary
Disguised unemployment occurs in developing countries, particularly those with high population density and heavy reliance on agriculture. This economic concept suggests that a significant portion of the labor force in the traditional agricultural sector contributes little or nothing to the total output. These individuals may appear employed, but their marginal productivity is zero or very low, meaning their removal from the workforce would not decrease overall production.1
This situation often arises due to the extended-family system, which shares the farm's output among all members, allowing those with minimal contribution to maintain a basic standard of living. While this labor might be transferable to other sectors without immediate cost to society, a key challenge is providing sustenance for these workers during the transition, especially for large-scale projects. It's important to distinguish this from seasonal unemployment, which depends more on crop cycles than population density. Underemployment, where individuals work fewer hours than normal or are overqualified for their jobs, is a related concept.12
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economic developmentSurplus resources and disguised unemploymentTwo theories emphasized the existence of surplus resources in developing countries as the central challenge for economic policy. The first concentrated on the countries with relatively abundant natural resources and low population densities and argued that a considerable amount of both surplus land…
Read MoreTwo theories emphasized the existence of surplus resources in developing countries as the central challenge for economic policy. The first concentrated on the countries with relatively abundant natural resources and low population densities and argued that a considerable amount of both surplus land…
Read More- economic developmentThe role of exports
…there is little or no disguised unemployment once labour-market regulations are dismantled and incentives are created for individual firms to sell in the export market. Second, most developing countries have such small domestic markets that efforts to grow by starting industries that rely on domestic demand result in uneconomically small,…
Read More…there is little or no disguised unemployment once labour-market regulations are dismantled and incentives are created for individual firms to sell in the export market. Second, most developing countries have such small domestic markets that efforts to grow by starting industries that rely on domestic demand result in uneconomically small,…
Read More