Question

State the meaning of 'Disguised Unemployment'.

Hint:

Remember: Disguised unemployment often occurs in sectors where labor is abundant, but the work is inefficient, leading to underutilized workers.

Answer 1

Step 1: Conceptual Definition.
Disguised unemployment is a phenomenon where the number of people engaged in a specific task is more than what is actually required. It is called "disguised" because workers appear to be employed, but their contribution to total output is negligible. Step 2: The Marginal Productivity Aspect.
In technical terms, the marginal physical productivity of such labor is zero. This means that if these extra workers were removed from the task, the total production would remain unchanged. This is most common in the agricultural sector of overpopulated countries where entire families work on small plots of land.