Economics Notes (Class 11)

CBSE Class 11 Economics Chapter 7 Employment

Written by cbselearners





Work plays an important role in our lives as an individual and as members of society.
worker is an individual, who is involved in some productive activity, to earn a living.

An economic activity refers to the activity performed by people to earn the living. The main three 
types of economic activities are consumption, production, and distribution.

Production activity refers to all those activities which are undertaken to produce goods and services for the generation of income.

Labour force: All persons, who are working (have a job) and those are not working but able to work and willing to work at the existing wage rate constitutes labor force.

Labour Force: Persons working + persons seeking and/or available for work.

Workforce: The number of persons, who are actually employed at a particular time is known as a workforce. It includes all those persons who are actually engaged in productive activities. This includes person between the age group of 15-60 years.

Labour supply: It refers to the various amount of labor that workers are willing to work, corresponding to a particular wage rate.

WorkForce Participation Rate(Ratio):- It is measured as the ratio between the workforce and total population of a country.


Types of Workers

(a) Self-employed
(b) Hired workers
i. Casual Workers
ii. Regular Workers(Salaried)

(a) Self Employed:- The worker who owns and operates an enterprise to earn their livelihood are known as self-employed.

(b) Hired workers:- Those people who are hired by others and are paid wages or salaries as a reward for their services are called hired workers.
1.     Casual Workers:- Those people, who are not hired by their employers on a regular/permanent basis and do not get social security benefits are said to be casual workers.
2.     Regular Workers(Salaried):– When a worker is engaged by someone or by an enterprise and paid his or her wages on a regular basis, they are known to as regular salaried employees or regular workers.
About two-fifths of the total population in the country is engaged in various economic activities.
Men particularly rural men form the major section of the workforce in India.
Majority of workers in India are self-employed, casual wage laborers and regular salaried employees together account for less than half the proportion of India’s workforce.
About three fifth of India’s workforce depends on agriculture and other allied activities as the major source of livelihood.
Jobless Growth: It is defined as a situation where GDP grows faster than the employment opportunities resulting in unemployment.

Casualisation and informalisation of employment: Casualisation refers to a situation when the percentage of casually hired workers in the total workforce tends to rise over time.

Informalisation: Refers to a situation when people tend to find employment more in the informal sector of the economy, and less in the formal sector of the economy.

Unemployment: It is a situation where a person is ready and willing to work at the prevailing wage-rate but doesn’t get work.

Unemployment Rate: It is calculated as the percentage of the labor force who are unemployed, not as the percentage of the total population.

Types of Unemployment

1. Rural unemployment
a. Seasonal Unemployment
b. Disguised Unemployment

2. Other types of unemployment
a. Open
b. Frictional
c. Structural
d. Cyclical

3. Urban Unemployment
a. Industrial Unemployment
b. Educated Unemployment
c. Technological Unemployment

  • Frictional unemployment is defined as the unemployment that occurs because of people moving or changing occupations.
  • Structural unemployment is defined as unemployment arising from technical change such as automation, or from changes in the composition of output due to variations in the types of products people demand. For example, a decline in the demand for typewriters would lead to structurally unemployed workers in the typewriter industry.
  • Cyclical unemployment is defined as workers losing their jobs due to business cycle fluctuations in output, i.e. the normal up and down movements in the economy as it cycles through booms and recessions over time.
  • Open Unemployment refers to that situation wherein the worker is willing to work and has the necessary ability to work yet he does not get work and remains unemployed for the full time.
  • Seasonal Unemployment:- It refers to a situation where a number of people that are not able to find a job in a particular season.
  • Disguised unemployment is a kind of unemployment in which some people look like being employed but are actually not employed fully. This situation is also known as Hidden Unemployment. In such a situation more people are engaged in a work than required. In other words, it refers to a situation of employment with surplus manpower in which some workers have zero marginal productivity. For example in rural areas, this type of unemployment is generally found in the agricultural sector.
  • Technological Unemployment:- A somewhat structural unemployment may take place in an economy as a result of technological improvement. Such unemployment may be described as technological unemployment. Due to the introduction of new machinery, improvement in methods of production, labor-saving devices etc., some workers tend to be replaced by machines. Their unemployment is termed “technological unemployment.”
  • Educated Unemployment:- Among the educated people, apart from open unemployment, many are underemployed because their qualification does not match the job. The faulty education system, mass output, preference for white collar jobs, lack of employable skills and dwindling formal salaried jobs are mainly responsible for unemployment among educated youths in India. Educated unemployment may be either open or underemployment.

Causes of Unemployment

  1. The slow rate of economic growth
  2. Population explosion
  3. Underdeveloped agriculture
  4. Defective educational system
  5. Slow growth of Industry
  6. The decline of the cottage and small industry.
  7. Faulty planning
  8. Inadequate employment planning.
  9. Low capital formation.
  10. Excessive use of Foreign Technology
  11. Lack of financial resources
  12. Increase in the labor force


Remedial Measures for Unemployment

  1. Accelerating growth rate of GDP
  2. Control of population growth
  3. Development to small-scale enterprises.
  4. Encouragement in infrastructure.
  5. Special employment programmes.
  6. Rapid industrialization.

Special Programmes to Fight Poverty and Unemployment

Mahatma Gandhi National Rural Employment Guarantee Act (MNREGA)
Its a significant recent attempt of govt, offering guaranteed employment to those in the rural areas who are below poverty line.
a. Swarn Jayanti Sahari Rozgar Yojna.
b. Swarn Jayanti Gram Swarozgaar Yojna.
c. Pradhan Mantri Gramodaya Rozgar Yojna.

NCERT Solutions

Question 1. Who is a worker?

Answer. All people who are engaged in economic activities in whatever capacity are called workers.

Question 2. Define worker-population ratio.

Answer. The percentage of a number of workers with respect to total population is called worker-population ratio.

Question 3. Are the following workers — a beggar, a thief, a smuggler, a gambler? Why?

Answer. These are not examples of workers because although they are earning their livelihood they are not doing economic activities. Activities of a thief, a smuggler, and a gambler are illegal activities and thus they are doing crimes. A beggar is proving to be a liability for the society as he is not contributing towards the economic development of the society.

Question 4. Find the odd man out (i) owner of a saloon (ii) a cobbler (iii) a cashier in Mother Dairy (iv) a tuition master (v) transport operator (vi) construction worker.

Answer. A cashier in Mother dairy is different from all others because the cashier is working in a regular salaried job.

Question 5. The newly emerging jobs are found mostly in the sector (service/manufacturing).

Answer. Service Sector

Question 6. An establishment with four hired workers is known as (formal/informal) sector establishment.

Answer. Informal sector

Question 7. Raj is going to school. When he is not in school, you will find him working on his farm. Can you consider him as a worker? Why?

Answer. Raj can be considered as a worker because he is contributing towards the productivity of his farm.

Question 8. Compared to urban women, more rural women are found working. Why?

Answer. Women in rural areas often work in various farming processes; like harvesting and threshing. We know that farming processes need a number of workforces and this need can only be met with the participation of women workers as well. Sometimes, it is cost saving for the farm owner to hire a female worker because female workers are paid less than male workers. In urban areas, most of the people work in regular salaried jobs and as self-employed. Due to fewer opportunities and more demand, often the male workers are able to get the job in urban areas. Moreover, starting a venture in urban areas can be highly costly and the costs may not be properly managed by women due to inherent social reasons. Another important fact is the prevalent mindset which sees women in their traditional role of a housewife. These are the reasons, more rural women are found working compared to urban women.

Question 9. Meena is a housewife. Besides taking care of household chores, she works in the cloth shop which is owned and operated by her husband. Can she be considered as a worker? Why?

Answer. When she is working in the cloth shop, she is doing an economic activity and hence she can be considered as a worker.

Question 10. Find the odd man out (i) rickshaw puller who works under a rickshaw owner (ii) Mason (iii) mechanic shop worker (iv) shoeshine boy.

Answer. The shoeshine boy is different because he is a self-employed person.

Question 11. Why are regular salaried employees more in urban areas than in rural areas?

Answer. In most of the villages, offices or factories are absent and hence there are negligible regular salaried jobs in rural areas. The situation is just the opposite in urban areas. Hence, regular salaried employees are more in urban areas than in rural areas.

Question 12. Why are fewer women found in regular salaried employment?

Answer. There are many reasons for the low representation of women in regular salaried employment. Deep-rooted social beliefs are the main reason which sees women as homemakers who are not supposed to venture out of their homes. Female literacy level is still below the male literacy level which means a less number of women are properly qualified and skilled to get a regular salaried job. On the other hand, a male is expected to earn a livelihood so that he can support his family and thus a boy is mentally conditioned since his childhood to do something. A regular salaried job usually ensures a better social recognition and hence most of the unemployed first try to land a regular salaried job.

Question 13. Analyze the recent trends in the sectoral distribution of workforce in India.

Answer. In spite of so many years of independence and the resultant planned economy, the sectoral distribution of workforce in India has not changed much. According to 2009 – 10 data, about 53% of the total workforce is engaged in the primary sector. The secondary sector employs about 22% of the total workforce, while the tertiary sector employs about 25% of the workforce. Since independence, distribution of workforce in the primary sector has declined to some extent but this decline is not significant. While the share of the secondary sector in the GDP has grown, this sector has failed to generate employment in that ratio. The tertiary sector has grown quite significantly both in terms of contribution to GDP and employment generation. However, even the tertiary sector has failed to generate enough employment so that the load on the primary sector could be reduced.

Question 14. Compared to the 1970s, there has hardly been any change in the distribution of workforce across various industries. Comment.

Answer. There have been major changes in terms of share of different sectors in employment generation; as shown by data discussed in the previous question’s answer. However, self-employment continues to be the major employment provider. The ratio of self-employed workers to total population has reduced marginally from 61% in the 1970s to 51% in 2010. The ratio of regular salaried employees has remained static at 15% during this period. But the most disheartening fact is the increase in the ratio of casual workers which increased from 23% to 33% during this period. This shows that although the economy has grown we are moving from salaried employment and self-employment towards casual employment. Some economists argue this as jobless growth.

Question 15. Do you think that in the last 50 years, employment generated in the country is commensurate with the growth of GDP in India? How?

Answer. In the last 50 years, employment generation in India is not commensurate with the growth of GDP. This can be understood by one of the graphs given in this chapter. The GDP growth was about 3.5% during the 1950s and it grew at a healthy rate of more than 8% in 2010. Employment generation was 0.39% in the 1950s and it maintained some semblance of growth between 1960s and 1990s. But by the second half of the 2010s, employment generation nosedived to very low rate.

Question 16. Is it necessary to generate employment in the formal sector rather than in the informal sector? Why?

Answer. The formal sector not only provides employment but also several social security benefits. A worker in the formal sector gets a higher salary and social security benefits. Various social security benefits that the worker can be assured of a better quality of life when he becomes old or physically disabled. After the life of a worker, his family members can be assured of a decent life. The situation is totally the opposite in the informal sector where the even regular salary is a dream for most of the workers. Hence, it is necessary to generate employment in the formal sector rather than in the informal sector.

Question 17. Victor is able to get work only for two hours in a day. Rest of the day, he is looking for work. Is he unemployed? Why? What kind of jobs could persons like Victor be doing?

Answer. According to the definition, if a person is able to get at least two hours job in a day then that person is considered as an employed person. Hence, Victor cannot be termed as unemployed. But since he is looking for work for the rest of the day, it can be assumed that he is not getting enough from two hours’ work. Another definition terms the unemployed as a person who keeps on looking for work because he does not have enough work. According to this definition, Victor is unemployed. Victor may be doing some part-time job; like supplying milk in the morning or distributing newspaper or pamphlets.

Question 18. You are residing in a village. If you are asked to advise the village panchayat, what kinds of activities would you suggest for the improvement of your village which would also generate employment?

Answer. I will suggest increasing the scope for alternate sources of livelihood. The farmers should be educated and trained in food processing or in animal husbandry or horticulture. People can also be trained in various handicrafts so that cottage industry can be started in the village. These steps would help in improving employment opportunities in the village.

Question 19. Who is a casual wage laborer?

Answer. A worker who does not get a regular salaried job and is neither self-employed is termed a casual wage laborer. A casual wage laborer may not get work on a regular basis. Although the government prescribes minimum wages for such workers most of them are unable to get even the minimum wages.

Question 20. How will you know whether a worker is working in the informal sector?

Answer. If the worker is not getting social security benefits then it is clear that he works in the informal sector. Pension, gratuity and provident fund are the major tools for providing social security net.

Question 21. The following table shows the distribution of the workforce in India for the year 1972-73. Analyze it and give reasons for the nature of workforce distribution. You will notice that the data is pertaining to the situation in India 30 years ago!

Answer. This table reveals some interesting facts about workforce composition in India during the 1970s. A very high proportion of the workforce (about 80%) is in rural areas, compared to just 20% of the workforce in urban India. This can be correlated to the fact that during this period, a majority of Indians lived in villages. Participation of female workers if much better in rural areas compared to in urban areas. This is in tune with the prevailing situation in our country. Various data in this chapter shows that women workforce is in the better ratio in rural areas than in urban areas.

Question 22. The following table shows the population and worker population ratio for India in 1999-2000. Can you estimate the workforce (urban and total) for India?

Answer. Urban (9.6 crores), total (39.6 crores)

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