The International Labour Organization (ILO) defines unemployment as being out of a job; being available to take a job; and actively engaged in searching for work.
Author
Rahul Menon, Associate Professor, Jindal School of Government and Public Policy, O.P. Jindal Global University, Sonipat, Haryana, India.
Summary
When the Periodic Labour Force Survey (PLFS) was released in 2017, it revealed the unemployment rate of India to be 6.1%, the highest ever recorded in India. The PLFS of 2021-22 showed unemployment reducing to 4.1%, much lower than before, but higher than some developed economies. The U.S unemployment rate fluctuated between 3.5% in July 2022 to 3.7% in July 2023.
However, the economies of the U.S and India are very different. The former is more industrialised, while the latter is characterised by a large informal sector. As such, the methods used to measure unemployment are very different.
Defining unemployment
Unemployment is not synonymous with joblessness. The International Labour Organization (ILO) defines unemployment as being out of a job; being available to take a job; and actively engaged in searching for work. Therefore, an individual who has lost work but does not look for another job is not unemployed.
The labour force is defined as the sum of the employed and the unemployed. Those neither employed nor unemployed — such as students and those engaged in unpaid domestic work — are considered out of the labour force. The unemployment rate is measured as the ratio of the unemployed to the labour force. The unemployment rate could also fall if an economy is not generating enough jobs, or if people decide not to search for work.
Published in: The Hindu
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