Essay on the Causes of Unemployment

Essay on the Causes of Unemployment – The problem of unemployment is becoming a colossal one. Various factors, individual as well as social, have caused this problem. Here the causation is not one-sided. For example, unemployment is often the cause of poverty and some other time, its consequence also. Hence, tracing the causes of unemployment is a difficult task.

C.B. Mamoria lists out the causes of unemployment in India in the following way:

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(i) The policy of “laissez-faire” or free trade pursued by the British did not accelerate the process of industrialization in India. As a result, employment opportunities could not be generated on a large scale, during the British rule. This situation continued up to the end of their rule in India.

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(ii) The unchecked growth of population from 1921 onwards posed the problems of finding job opportunities. For example, our population in 1921 was 251.3 millions and it increased to 361.0 millions in 1951. It has reached a record figure of 122.3 crore in 2008.

(iii) The decline of traditional skills and the decay of small scale and cottage industries led to a great pressure on land and this in turn resulted in the greater exodus of people from the rural to the urban areas. This added to urban unemployment.

(iv) The low level of investment and the neglect of industrial sector could not help the process of creating job opportunities.


GR. Madan speaks of two main types of causes of unemployment: (A) “individual or personal factors “, and (B) “external factors ” or “technological and economic factors “.

A. Individual or Personal Factors of Unemployment

(i) Age Factor:

Age factor fixes limitations on the range of choice of job opportunities. Too young and too old people are not eligible for many of the jobs. Some young people due to their inexperience, and some old people due to their old age, fail to get some jobs. Young people do not get jobs soon after their studies.


They will have to wait. People who are above 50 or 60 years are less adaptable and more prone to accidents. Their capacity to contribute to economic production is also relatively less.

(ii) Vocational Unfitness:

Many of our young people do not have a proper understanding of their own aptitudes, abilities and interests on the one hand, and the tasks or jobs or career they want to pursue, on the other. If willingness to do some job is not followed by the required abilities, one cannot find a job of one’s selection.

Employers are always looking forward to find persons who have the ability, experience, interest and physical fitness to work. Sometimes, there may be more men trained in a particular profession than required. The demand is less than the supply, and hence, unemployment.

(iii) Illness and / or Physical Disabilities or Incapabilities:

Due to the inborn or acquired disabilities or deficiencies some remain as partially employed or totally unemployed throughout their life. Illness induced by industrial conditions and the fatal accidents that often take place during the work may render a few other people as unemployed.

B. External Factors or Technological and Economic Factors

(i) Enormous Increase in Population:

The population in India is growing at an alarming rate. Every year India adds to her population 120 to 130 lakh people afresh. More than this, every year about 5 million people become eligible for securing jobs.

All these people who are eligible to work are not getting the jobs. Hence, population explosion in India is making the problem of unemployment more and more dangerous.

(ii) Trade Cycle:

Business field is subject to ups and downs due to the operation of trade cycle. Economic depression which we witness in trade cycle may induce some problematic or sick industries to be closed down compelling their employees to become unemployed. Fluctuations in international markets, heavy imposition of excise duties, business strains observed in the trade cycles adversely affect the security of jobs of some men.

(iii) Technological Advance – Mechanisation – Automation:

Technological advancement undoubtedly contributes to economic development. But unplanned and uncontrolled growth of technology may have an adverse effect on job opportunities.

Since industrialists are more interested in maximizing production and profit they prefer to introduce labour-saving machines. They always search for ways and means of reducing the cost of production and hence go after computerization, automation, etc. The result is technological unemployment. This state of affairs is very much in evidence in the Indian context today.

(iv) Strikes and Lockouts:

Strikes and lockouts had been an inseparable aspect of the Indian industrial field. Due to strikes and lockouts production used to come down and industries were incurring heavy losses. Workers used to become unemployed for a temporary period and some were being thrown out of job.

This state of affairs continued almost up to 1990s, that is, till the launching of the [NEP] New Economic Policy. This, prolonged period of four decades our industries received severe setbacks due to labour strikes which affected adversely industrial growth and industrial potential for fetching jobs. After 1990s, things however, have been changing and labour strikes are becoming comparatively rarer.

(v) Slow Rate of Economic Growth:

Job opportunities depend very much on economic growth. Since the rate of economic growth was very slow in the first 45 years after independence, the economy was not able to create enough job opportunities to the increasing number of job – seekers.

For example, in 1980s, the rate of growth of the number of job-seekers increased by 2.2%, while the rate of growth of the number of job opportunities was only 1.5%. This difference led to an enormous increase in the number of unemployed persons.

(vi) Backwardness of Indian Agriculture:

Age old mode of cultivation, too much dependence of too many people [more than 75%] on agriculture, widespread disguised unemployment, sentimental attachment towards land, etc., have adversely affected the – growth of Indian agriculture and its employment potential.

C. Other Causes of Unemployment:

In addition to the two main types of the causes of unemployment as mentioned by G.R. Madan, we may add a few other factors causing the problem such as the following.

(i) Unpreparedness to Accept Socially Degrading Jobs:

Some of our young men and women are not prepared to undertake jobs which are considered to be socially “degrading” or “indecent”. Example: Autorickshaw and taxi-driving, working as salesmen or sales girls in shops, doing waiter’s work and clerical work in hotels, etc., could be mentioned here as examples. Since the spirit of the dignity of labour is not properly inculcated in them, they become the victims of “false prestige” and face the risk of unemployment.

(ii) Defects in our Educational System:

Our system of education which appears like a remnant of the British colonial rule in India has its own irreparable defects and its contribution to the problem of unemployment can hardly be exaggerated.

There is no co-ordination between our industrial growth, agricultural development and our educational system. Our education does not prepare the minds of our young men to become self-employed; on the contrary, it makes them to depend on government to find for them some jobs.

(iii) Geographic Immobility of the Workers:

Occupational mobility and geographic mobility on the part of the workers lessen the gravity of the problem of unemployment. But in the Indian context, workers are not adventurous enough to move from one physical area to another in search of jobs, or to change their jobs to brighten their economic prospects.

They are either clinging on to their traditional profession or occupations especially in the rural area, or concentrated in one or the other urban centre, sometimes without any job.

(iv) Improper Use of Human Resources:

Lack of planning for the efficient utilization of human resources for productive purposes has been one of the causes of unemployment in India. In fact, there has been no proper co-ordination between the availability of human resources and its utilization in the productive field. As a result, in some units, there is the dearth of qualified man power and in some other units; we find its excess.

(v) Lack of Encouragement for Self-Employment:

Ever since the time of British, Indians have developed a tendency to give priority for salaried jobs rather than self-employment. Our education system has also been a failure in developing the spirit of self-employment among our youths.

As a result, young people tend to wait for getting some salaried jobs in offices, factories or business firms and private or public firms and concerns. They often wait for such jobs for years together as unemployed or under-employed youths.


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