Measurement of unemployment and underemployment
Methods of measuring unemployment and underemployment:
1. The income measure of unemployment
According to this criterion that part of labour force which earns income lower than a particular minimum would be a unemployed. In order to measure unemployment on the basis of low income employment, we will have to see the difference of per capita income to produce specific amount and services and the per capita income, which that labour is actually receiving.
In this respect we will have to define the proper level of income. Thus if people of UDC's earn below 1$ which may be the poverty line, such people will be unemployed. Because with such lower income, the health and welfare of people will be effected. It means, accordingly to this measure, the poverty and unemployment will be considered in same meaning.
2. The productivity criterion
The income criterion shows that the people whose income are below than minimum level of income or poverty line, they will be included in unemployment. This shows that people's income are low because they have contributed less. This criterion can be written as,
U=L-L* = o/o/L - o/o/L*
"L" shows actually employed labour
"L*" shows labour employed on suitable wages
O/O/L is the actual level of productivity
O/O/L* is the acceptable level of productivity
All this discussion shows that the productivity criterion tells us that how much is being contributed by the physical and mental efforts of labour to total output.
Therefore, those labour whose original product is zero or less than zero, they will be unemployed.
Following Lewis model of unlimited supply of labour, we find unemployment on the basis of criterion of productivity in agriculture sector, transportation sector and shops etc.
If we remove one half population from their present works. There will be no effect on the output. According to year 2004-05, 15-20% of population was unemployed. If we add the women then the proportion of employment amongst women may go to 30 to 40%.
3. Time criterion
According to this measure, the unemployment rises at that time when a person in a weak works less than the stipulated hours. Working hours which a person is supposed to provide for works, differ from society to society. This criterion is further divided into two parts.
Traditional measure of unemployment and underemployment
Under this method, two sub-measures are adopted.
A. Personal rate of unemployment;
This represents a ratio of unemployed to total labour force.
PRU = UN/ LF = 3.72 million/ 45.04 million × 100
= 8.27%
B. Time rate of unemployment;
Under this measure of unemployment and underemployment, the hours of unemployment are analysed. According to this criterion that the ratio of hours of unemployment and underemployment to total labour force of the economy in same reference period.
TRU = UNH/ LFH = 10/100 × 100 = 10%
In real life, the value of TRU may assume value between 0 and 1.
4. A new index measure of unemployment
Because of unemployment not only the unemployed have to lose income necessities and comfort of life but they also have to suffer from the pains and worries due to unemployment.
If we assume that along with increase in unemployment, pain & trouble of a person increase. If we find out the average of such intensities. This will help us to measure unemployment represented by
1. In case the value of i=1, it means the unemployed has to face the highest degree of intensity. This shows that the complete unemployment.
2. If i=0, it would represent no intensity. Thus the intensity which rises due to unemployment may depend upon the values in between 0 and 1. Thus parameter i may be regarded as an indicator of intensity.
1. The income measure of unemployment
According to this criterion that part of labour force which earns income lower than a particular minimum would be a unemployed. In order to measure unemployment on the basis of low income employment, we will have to see the difference of per capita income to produce specific amount and services and the per capita income, which that labour is actually receiving.
In this respect we will have to define the proper level of income. Thus if people of UDC's earn below 1$ which may be the poverty line, such people will be unemployed. Because with such lower income, the health and welfare of people will be effected. It means, accordingly to this measure, the poverty and unemployment will be considered in same meaning.
2. The productivity criterion
The income criterion shows that the people whose income are below than minimum level of income or poverty line, they will be included in unemployment. This shows that people's income are low because they have contributed less. This criterion can be written as,
U=L-L* = o/o/L - o/o/L*
"L" shows actually employed labour
"L*" shows labour employed on suitable wages
O/O/L is the actual level of productivity
O/O/L* is the acceptable level of productivity
All this discussion shows that the productivity criterion tells us that how much is being contributed by the physical and mental efforts of labour to total output.
Therefore, those labour whose original product is zero or less than zero, they will be unemployed.
Following Lewis model of unlimited supply of labour, we find unemployment on the basis of criterion of productivity in agriculture sector, transportation sector and shops etc.
If we remove one half population from their present works. There will be no effect on the output. According to year 2004-05, 15-20% of population was unemployed. If we add the women then the proportion of employment amongst women may go to 30 to 40%.
3. Time criterion
According to this measure, the unemployment rises at that time when a person in a weak works less than the stipulated hours. Working hours which a person is supposed to provide for works, differ from society to society. This criterion is further divided into two parts.
Traditional measure of unemployment and underemployment
Under this method, two sub-measures are adopted.
A. Personal rate of unemployment;
This represents a ratio of unemployed to total labour force.
PRU = UN/ LF = 3.72 million/ 45.04 million × 100
= 8.27%
B. Time rate of unemployment;
Under this measure of unemployment and underemployment, the hours of unemployment are analysed. According to this criterion that the ratio of hours of unemployment and underemployment to total labour force of the economy in same reference period.
TRU = UNH/ LFH = 10/100 × 100 = 10%
In real life, the value of TRU may assume value between 0 and 1.
4. A new index measure of unemployment
Because of unemployment not only the unemployed have to lose income necessities and comfort of life but they also have to suffer from the pains and worries due to unemployment.
If we assume that along with increase in unemployment, pain & trouble of a person increase. If we find out the average of such intensities. This will help us to measure unemployment represented by
1. In case the value of i=1, it means the unemployed has to face the highest degree of intensity. This shows that the complete unemployment.
2. If i=0, it would represent no intensity. Thus the intensity which rises due to unemployment may depend upon the values in between 0 and 1. Thus parameter i may be regarded as an indicator of intensity.
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