Meaning and Definition of Unemployment

In simple terms, unemployment refers to the state where a person is without work and is sitting idle. However, in economics, unemployment refers to the situation where a person is willing and capable of working at the prevailing wage rate but is unable to find employment.

However, the situation where a person is capable of working but is not willing to work at the prevailing wage rate or is deliberately avoiding work is not considered actual unemployment but voluntary unemployment.

Unemployment is a major social and economic problem in most countries worldwide. It creates various social problems such as poverty, inequality, theft, robbery, prostitution, human trafficking, crime, political instability, and conflict. 

It also leads to brain drain or the problem of the country's labor force migrating abroad. Therefore, it is essential to solve the problem of unemployment. 

In Nepal, about 2% of the population is fully unemployed, and 30% of the population is underemployed.

Types of Unemployment

The types and nature of unemployment vary according to the economic situation of a country. The nature of unemployment seen in poor countries and rich countries is different. 

In rich countries, unemployment is based on industrialization, technology, and temporary factors, whereas in poor countries, the nature of unemployment is based on agriculture, is invisible, and is permanent. 

Underdeveloped countries, including Nepal, are facing a significant problem of unemployment. This has led to increased poverty and the country's labor force being forced to migrate abroad.

The important types of unemployment are as follows:

(a) Open Unemployment: Open unemployment refers to the situation where a person is willing to work but is unable to find any work and is sitting idle. This is a situation where a person is fully unemployed. This type of unemployment is found in urban markets. Since urban markets are the center of employment, educated people often flock to urban markets in search of work. However, they are unable to find work or employment. This type of unemployment is prevalent in developed countries like Japan, America, Britain, Canada, etc.

(b) Disguised Unemployment: Disguised unemployment is also called invisible unemployment. This type of unemployment is found in underdeveloped and agricultural-dominated countries. More specifically, it is prevalent in the agricultural communities of these countries. Although all members of the family appear to be employed when viewed from the outside, they do not get work that lasts throughout the year. In rural areas, due to the lack of other alternative sources of employment besides agriculture, all members of the family work together in agricultural activities. If the number of some workers is reduced, there is no decrease in production. Therefore, this is called disguised unemployment.

(c) Underemployment: Underemployment refers to the situation where a person is working in a job that is below their capacity, qualifications, education, or training, or is unable to get full-time work. For example, a person who has passed the Bachelor's level is qualified to teach at the secondary level, but if they are working as a primary school teacher, this is underemployment. Similarly, if a daily wage laborer gets work for only one or two days a week or for only two or three hours a day, this is also underemployment.

(d) Seasonal Unemployment: Seasonal unemployment refers to unemployment that arises due to changes in the season. Countries like Nepal, which are agricultural-dominated, face a significant problem of seasonal unemployment. Especially, agricultural laborers get employment only during the planting and harvesting seasons. They have to remain unemployed or without work during other times. This type of unemployment is also found in other businesses. For example, people selling ice cream and laborers working in ice cream factories become unemployed during the winter season. Therefore, the problem of unemployment also arises due to adverse seasonal factors.

(e) Educated Unemployment: Educated unemployment refers to the situation where people who have obtained higher education or are literate are jobless or unemployed. In underdeveloped countries, due to the lack of development in the industrial sector, a large number of literate or educated people are unemployed. They do not prefer to do jobs like agriculture and animal husbandry. Government sector employment is not sufficient for all educated people. This type of unemployment cannot be ended without the large-scale development of the industrial sector.