Q. Disguised unemployment generally means (UPSC Prelims 2013)
Answer:
marginal productivity of labour is zero
Notes: The correct answer is
[C] marginal productivity of labour is zero. Disguised unemployment is a characteristic feature of developing economies, particularly in the agricultural sector.
- Understanding Disguised Unemployment: This occurs when more people are engaged in an activity than are actually required. Even if some people are removed from the work, the total production remains unchanged. This is common in family-owned farms in India, where all members of a family work on a small plot of land because they have no other employment opportunities.
- Marginal Productivity (Statement C is Correct): In economics, "Marginal Productivity" refers to the additional output produced by adding one more unit of labor. In a state of disguised unemployment, the "extra" workers are not adding anything to the total output. Therefore, their Marginal Productivity of Labour (MPL) is zero.
- Large Number Unemployed (Statement A is Incorrect): This describes "Open Unemployment," where people are visibly without work and are looking for jobs. In disguised unemployment, people appear to be employed, but their contribution is redundant.
- Alternative Employment (Statement B is Incorrect): While the lack of alternative employment is often the cause of disguised unemployment, the term itself is defined by the productivity level of the labor, not the availability of other jobs.
- Low Productivity (Statement D is Incorrect): This is a vague description. While the average productivity might be low, the specific economic definition of disguised unemployment hinges on the marginal productivity being zero (or even negative).