Difference between Disguised Unemployment and Seasonal Unemployment
Unemployment is a situation where an individual is willing and able to work but is unable to find a suitable job. It can have various forms, but two of the most common types are disguised and seasonal unemployment.
Disguised Unemployment
Disguised unemployment is a type of unemployment where more people are employed in a sector than actually required for the work. It is also known as hidden unemployment. In disguised unemployment, there are more workers than what is needed to complete the work, and these extra workers are not contributing to productivity. This form of unemployment mostly occurs in agricultural or rural areas where more farmers work on a single piece of land than required.
For instance, 5 people are required to work on a piece of land, but 10 people work on that same land. In this scenario, 5 people are surplus, and the extra 5 workers are not contributing to productivity. They are just increasing the headcount, which means there is no actual increase in productivity.
Seasonal Unemployment
Seasonal unemployment is a type of unemployment that occurs when a particular sector is unable to provide employment due to seasonal factors. For example, during the winter season, the ice cream industry may reduce its production capacity, and workers in that industry may be unemployed.
Another example is the tourism industry, which usually flourishes during the summer season. So, during the winter season, workers in the tourism industry may be unemployed.
The main difference between disguised and seasonal unemployment is that disguised unemployment occurs when more workers are employed in a sector than necessary, while seasonal unemployment occurs due to seasonal fluctuations in demand for goods and services.
In conclusion, understanding the difference between these two types of unemployment is essential because it can help policymakers in their decision-making process for reducing unemployment. While disguised unemployment can be reduced by making smallholder agriculture more productive, seasonal unemployment can be managed by creating alternate job opportunities in the off-season for the affected workers.
Table difference between disguised unemployment and seasonal unemployment
| Disguised Unemployment | Seasonal Unemployment |
|---|---|
| Occurs when there are more people employed in a sector than are actually required for a given task or activity. | Occurs when employment opportunities are tied to seasonal variations in demand for goods or services. |
| Workers in disguised unemployment are not actually contributing to the output of the sector and thus, their removal will not affect overall production. | Workers in seasonal unemployment are temporarily laid off during off-seasons and rehired during peak periods. |
| It can be common in rural areas where agriculture is the main industry and there may be more labor available than is required for farming activities. | It can be common in industries like tourism, where demand for services is high during certain seasons, but low during others. |
| Disguised unemployment is generally a more permanent form of underemployment. | Seasonal unemployment is temporary and workers can expect to be rehired when peak periods return. |