Distinguish between Disguised and Structural employment. Give two adverse effects ofUnemployment

Disguised Unemployment and Structural Unemployment are two different types of unemployment, each with its own characteristics and causes.

1. Disguised Unemployment: This type of unemployment is typically seen in the agricultural and informal sectors. Disguised unemployment refers to a situation where more people are employed than are actually needed for a job. In other words, even if a portion of the workforce is removed, production levels will not be affected. For example, in a family farm, all members might be working on the same plot of land, but not all may be needed to maintain the same level of output.

2. Structural Unemployment: This type of unemployment occurs when there is a mismatch between the skills that workers in the economy can offer and the skills needed for the available jobs. This mismatch can be caused by technological changes, changes in the economy, or geographical reasons. For example, the decline of a specific industry in a region can lead to structural unemployment.

Adverse effects of Unemployment:

1. Economic Impact: Unemployment leads to a waste of resources and potential output that could have been generated if the unemployed were gainfully employed. It also leads to a decrease in the income of individuals, reducing their purchasing power and leading to a decrease in aggregate demand.

2. Social Impact: Unemployment can lead to social problems like increased crime rates, mental health issues, and social unrest. It can also lead to a decrease in the standard of living and increase poverty rates.