Explain the concept of disguised unemployment with example
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Disguised unemployment is a type of unemployment situation in which people seem to engage in economic activity but in reality, they are not.
Why disguised unemployment problem arises?Disguised unemployment refers to the unemployment situation in which people are engaged in an activity in which there is no requirement for the workforce, they seem to be employed, but in actuality, they are not. Instead, they consider themselves engaged, but as they are made to work less than their capacity or potential, they are called disguised unemployed. This unemployment problem arises due to the no opportunity availability. People are compelled to engage in this kind of unemployment as they don't have other employment opportunities.
For example- A family has seven people. They have a plot of land in which they grow rice and wheat. The whole family works on the family farm. Better production can be drawn out by engaging four people. If we shift the extra three people to another employment opportunity, production will not go down, and the shifting will increase the income of the family. Here, the additional three people are called disguised unemployed.
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