Question

Is there any relationship between unemployment and poverty? Explain.

Answer 1

Poverty and unemployment have an important nexus. Those who fail to avail employment become a burden on the limited family income and thus, per capita consumption level decreases.

The decrease in consumption levels further decreases an individual's earning capacity and he is unable to escape the vicious circle of poverty. It has been observed that most of the poor are either unemployed or intermittently employed as casual labourers. The uncertainty of income does not enable them to meet their basic needs and they are caught in poverty. Therefore, we can safely conclude that a high degree of positive correlation exists between poverty and unemployment.