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What are the causes of Unemployment?

Unemployment is a situation in which a person is actively looking for employment but cannot find it. Unemployment is considered  a key indicator of the health of the economy.

The most widely used to  estimate of unemployment is the unemployment rate. It is measured  by dividing the number of unemployed people by the number of employed people.


Let's Understand in depth


Understanding Unemployment


Unemployment is an important economic indicator because it indicates the ability (or inability) of workers to find paid work and contribute to the productive output of the economy. More unemployed people mean lower overall economic output.


The definition of unemployment does not include the  people who are not in  the workforce for reasons such as retirement, higher education or disability.2



Cause of unemployment
Cause of unemployment


Causes of Unemployment


Unemployment refers to a situation in which a person is actively looking for a job. job  and can't find work. Unemployment is an important indicator for the economy. The unemployment rate is the number of  unemployed divided by the labor force or employed persons.


The Caste System


The caste system has always been one of the most important factors for unemployment in India. Certain types of work are prohibited for members of certain castes in certain places. Work is often given to members of a particular community rather than to those who truly deserve it and have the right skills for it. This leads to a high unemployment rate.


Inadequate Economic Growth


Economic growth in India is inadequate and therefore the economy is underdeveloped. Slow growth does not provide adequate unemployment opportunities for an ever-growing population. As the population grew, the economy was no longer able to meet employment needs and an increasing proportion of people were unable to find work. This leads to inadequate employment levels across the country.


Rising Population 


There is a forecast that India's population will surpass that of China by 2024; In addition, it will  be the most populous country. Population growth cannot match the country's economic growth, resulting in the majority of society being unemployed.




Low Savings and Investment Interest Rates


In India there is a general lack of sufficient capital. As a result, the  savings are small and the investment is lower. With  higher investment rates, new jobs could be created and the economy would  boom. In addition, there is a lack of investment in rural areas and second and third tier cities, leaving huge untapped employment potential.


Inefficient Economic Planning


National plans are missing due to the important  gap between labor supply and  demand.It is important that labor supply and demand  should be  balanced to ensure that those who need work can get it. Otherwise, many people will compete for the same job.




Labor Immobility


Culturally, bonding and maintaining closeness to family is an important priority for many Indian citizens. The result is that people avoid traveling long distances from their families in search of work.

In addition, language, religion and climate can also contribute to low  labor mobility.

Unsurprisingly, unemployment is increasing when many of those who would otherwise be suitable for employment cannot travel to get there. They become highly specialized, but the Indian education system does not provide the right training and specialization necessary for these jobs is required.As a result, many people who want to work become unemployed due to a lack of qualifications.


Lack of Basic Skills


A study shows that 33% of educated youth in India are unemployed due to  lack of future skills. Million students in our country remain without practical learning and knowledge of solid practical activities even after leaving school. Solutions to Eliminate the Causes of Unemployment.


The various solutions that can be used to address the problems of unemployment in India involve a complex and multi-faceted approach which can be analyzed in the following ways:


Development of Skills Programs


Development of specific skill programs would help in  equipping the workforce with various required skills  and also help in addressing various skills gaps.


Reforms in the Education Sector



Reforms in the education sector can help to align labor market requirements and also introduce practical and vocational training.


Promoting Entrepreneurship


Promoting entrepreneurial skills through financial assistance and reducing bureaucratic hurdles as well as offering mentoring can contribute to job creation.


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