UPSC Prelims 2013 Q67: Indian Economy – Human Development, Poverty & Employment Schemes
Disguised unemployment generally means
- (a) large number of people remain unemployed
- (b) alternative employment is not available
- (c) marginal productivity of labour is zero
- (d) productivity of workers is low
Answer: (c) marginal productivity of labour is zero
Explanation
Disguised unemployment
In disguised unemployment, more people work on a job than are needed.
If some are removed, output does not fall.
So the marginal productivity of labour is zero.
| Option | Verdict | Reason |
|---|---|---|
| (a) Large number of people remain unemployed | Incorrect | They appear employed |
| (b) Alternative employment is not available | Incorrect | A cause, not the meaning |
| (c) Marginal productivity of labour is zero | Correct | The textbook definition |
| (d) Productivity of workers is low | Incorrect | Low is not the same as zero at the margin |
Example: a farm needs three workers, but five family members work on it; the extra two add nothing.
Types of unemployment:
| Type | Meaning |
|---|---|
| Disguised | Common in Indian agriculture |
| Seasonal | Work only in part of the year |
| Structural | Skills do not match the jobs |
| Frictional | Short gap between jobs |
| Cyclical | Due to a slump in business |
Answer: (c) marginal productivity of labour is zero.
Why each option is right or wrong
- (a) Incorrect. The workers are not openly unemployed; they seem to have work.
- (b) Incorrect. Lack of alternative employment is the cause, not the definition.
- (c) CORRECT. Disguised unemployment means the marginal productivity of labour is zero.
- (d) Incorrect. Low productivity is not the same as zero marginal productivity.
Key point
Disguised unemployment: surplus workers whose removal does not reduce output (marginal product zero); typical of Indian agriculture.
Remember
Disguised unemployment = zero marginal productivity.
Common mistakes
- Confusing average productivity with marginal productivity.
- Treating it as open unemployment.
- Mixing it up with seasonal unemployment.
Exam tip
Take the extra worker away; if output stays the same, he was disguisedly unemployed.
Sources
- NCERT Class IX — Economics, Ch 2 (People as Resource)
- NCERT Class XI — Indian Economic Development (Employment: Growth, Informalisation and Other Issues)