Explain disguised unemployment with an example.


The situation of underemployment is referred to the situation when people are apparently working but all of them are made to work less than their potential is called disguised unemployment. In this case, the person considers himself employed but is actually not working.


(i) In rural areas, where agriculture is the main source of income, this kind of unemployment can be seen often. If a piece of land requires only three people to work on it and instead five people are working on it, then the two extra people are said to be in a situation of disguised unemployment.

(i) In cities and urban areas, disguised unemployment is seen when painters, plumbers, electricians are unable to find work on a daily basis and work way less than their potential.

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