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Disguised unemployment generally means

June 1, 2025 by rawan239

Disguised unemployment generally means

large number of people remain unemployed

alternative employment is not available

marginal productivity of labour is zero

productivity of workers is low

This question was previously asked in

UPSC IAS – 2013

Download PDF Attempt Online

The correct answer is C) marginal productivity of labour is zero.

Disguised unemployment occurs when people appear to be employed, but their contribution to total output is negligible or zero. This means that even if these individuals are removed from the workforce, the overall production level does not decrease. Their marginal productivity of labour (the additional output produced by employing one more unit of labour) is effectively zero or very close to it. This type of unemployment is common in agriculture in developing countries, where multiple family members might work on a small plot of land even though fewer could achieve the same output.

Option A describes general unemployment. Option B explains a possible cause or consequence of disguised unemployment but not its definition. Option D describes low average productivity, which can be a result of disguised unemployment but is not the defining characteristic itself.

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