{"id":27004,"date":"2024-02-13T09:19:20","date_gmt":"2024-02-13T09:19:20","guid":{"rendered":"https:\/\/edukemy.com\/blog\/?p=27004"},"modified":"2024-02-13T09:19:22","modified_gmt":"2024-02-13T09:19:22","slug":"upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity","status":"publish","type":"post","link":"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/","title":{"rendered":"UPSC Mains &#8211; Define &#8216;underemployment&#8217; and explore its prevalence in the Indian workforce. How does it impact economic growth and productivity?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noreferrer noopener\"><img fetchpriority=\"high\" decoding=\"async\" width=\"1280\" height=\"300\" src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png\" alt=\"\" class=\"wp-image-46428\" srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/09\/Attempt-our-Daily-Weekly-Current-Affairs-Quiz-now-10-1-585x137.png 585w\" sizes=\"(max-width: 1280px) 100vw, 1280px\" \/><\/a><figcaption><a href=\"https:\/\/edukemy.com\/refer-and-earn\" target=\"_blank\" rel=\"noopener\" title=\"\">Refer &amp; Earn NOW<\/a><\/figcaption><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_85 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<label for=\"ez-toc-cssicon-toggle-item-6a517940deb82\" class=\"ez-toc-cssicon-toggle-label\"><p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\n<span class=\"ez-toc-cssicon\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-6a517940deb82\"  \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Introduction\" >Introduction:<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Body\" >Body:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Concept_of_Underemployment\" >Concept of Underemployment:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Causes_of_Underemployment\" >Causes of Underemployment:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Prevalence_of_Underemployment_in_the_Indian_Labor_Force\" >Prevalence of Underemployment in the Indian Labor Force:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Impact_on_Economic_Growth\" >Impact on Economic Growth:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Impact_on_Productivity\" >Impact on Productivity:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Challenges_in_Reducing_Underemployment_in_India\" >Challenges in Reducing Underemployment in India:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Government_Initiatives_and_Interventions_to_Address_Underemployment\" >Government Initiatives and Interventions to Address Underemployment:<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Conclusion\" >Conclusion:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#In_case_you_still_have_your_doubts_contact_us_on_9811333901\" >In case you still have your doubts, contact us on 9811333901.&nbsp;<\/a><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><ul class='ez-toc-list-level-4' ><li class='ez-toc-heading-level-4'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/edukemy.com\/blog\/upsc-mains-define-underemployment-and-explore-its-prevalence-in-the-indian-workforce-how-does-it-impact-economic-growth-and-productivity\/#Visit_our_YouTube_Channel_%E2%80%93_here\" >Visit our YouTube Channel \u2013&nbsp;here<\/a><\/li><\/ul><\/li><\/ul><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Introduction\"><\/span>Introduction: <span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Underemployment refers to the situation where workers are engaged in jobs that are either less than full-time, irregular or do not fully utilize their skills and qualifications. This concept holds significant importance, especially within the context of India&#8217;s diverse and evolving labor force.<\/p>\n\n\n\n<p class=\"has-text-align-center\"><img decoding=\"async\" data-src=\"https:\/\/lh7-us.googleusercontent.com\/rZmxdprFqQcSLkEjIaNrDX5x_gDheHYcw616acOLzqcxAwjyNo9Lx69T64QfVLjh2hAupeMPvdDpGwhwMayI_8WeLkLBk5SwJGfczReg8Rvwp0eINwoFvBLkcCEcePyU4ExvyFYijPQT8WAZ8X_3QVQ\" width=\"518\" height=\"70\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" class=\"lazyload\" style=\"--smush-placeholder-width: 518px; --smush-placeholder-aspect-ratio: 518\/70;\"><\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Body\"><\/span>Body:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Concept_of_Underemployment\"><\/span>Concept of Underemployment: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Visible Underemployment: <\/strong>Workers possessing skills for full-time positions often find themselves working fewer hours in part-time jobs due to limited availability of full-time opportunities in their field. <\/li><li><strong>Invisible Underemployment: T<\/strong>his occurs when individuals work in positions that don&#8217;t fully utilize their skills, making it challenging to measure and identify without extensive research. <\/li><li><strong>Marginally Attached to the Labor Force: <\/strong>Includes individuals who, despite being available for work, become discouraged workers after prolonged joblessness.<\/li><li><strong>Working Poor:<\/strong> Encompasses those with full-time employment but living below the poverty line, indicating a mismatch between income and job quality. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Causes_of_Underemployment\"><\/span>Causes of Underemployment:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Business Cycle:<\/strong> Economic recessions or depressions exacerbate underemployment as organizations hire fewer full-time employees. <\/li><li><strong>Supply and Demand: <\/strong>A surplus of workers relative to job demand, often due to population growth or decreased demand in certain industries, can lead to underemployment.<strong> <\/strong><\/li><li><strong>Technological Changes: <\/strong>Automation and technological advancements displace workers in roles that have become automated. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Prevalence_of_Underemployment_in_the_Indian_Labor_Force\"><\/span>Prevalence of Underemployment in the Indian Labor Force: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Informal Sector: <\/strong>About 80% of India&#8217;s labor force is engaged in the informal sector, where job insecurity and low wages prevail, leading to skill underutilization and underemployment.<strong> <\/strong><\/li><li><strong>Seasonal Employment:<\/strong> With approximately 43% of India&#8217;s workforce in agriculture, many jobs are limited to specific seasons, causing unemployment or reduced hours during off-seasons and contributing to underemployment.<\/li><li><strong>Disguised Unemployment in Agriculture: <\/strong>With 54% of total employment in agriculture, India faces disguised unemployment, leading to underutilization and low agricultural productivity<strong>.<\/strong><\/li><li><strong> Poverty Levels: <\/strong>Underemployment results in lower income, leading to reduced consumption, impacting businesses, and contributing to economic stagnation and poverty.<\/li><li><strong>Mismatched Skills: <\/strong>75% of Indian workers are in jobs that don&#8217;t fully utilize their skills, resulting in underemployment. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_on_Economic_Growth\"><\/span>Impact on Economic Growth:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Underutilization of Labor Force:<\/strong> In 2022, India&#8217;s labor force participation rate was only 47.73%, indicating significant underutilization of the working-age population.<strong> <\/strong><\/li><li><strong>Income Inequality:<\/strong> India&#8217;s Gini coefficient was 35.2 in 2022-23, reflecting substantial income inequality. <\/li><li><strong>Reduced Consumer Spending: <\/strong>Underemployment-related income constraints led to a 75% decline in India&#8217;s retail sales in April 2020. <\/li><li><strong>Aggregate Demand: <\/strong>Reduced demand caused by underemployment contributed to a significant industrial production decline during the pandemic. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Impact_on_Productivity\"><\/span>Impact on Productivity: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Limiting Skill Development:<\/strong> Underemployment leads to stagnant skills, reducing individual productivity. <\/li><li><strong>Innovation Constraints:<\/strong> Underemployment hampers innovation as highly skilled workers miss opportunities for creative solutions. <\/li><li><strong>Mismatches in Skills:<\/strong> Skill mismatches cause inefficiencies as workers do tasks outside their expertise, diminishing productivity. <\/li><li><strong>Underutilization of Talents:<\/strong> Widespread underemployment leads to untapped talents, resulting in substantial productivity loss for the economy.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Challenges_in_Reducing_Underemployment_in_India\"><\/span>Challenges in Reducing Underemployment in India: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Informal Sector Dominance:<\/strong> The informal sector employs a vast majority, making it challenging to address underemployment effectively. <\/li><li><strong>Lack of Quality Jobs: <\/strong>Many informal sector jobs are low-paying and lack job security or benefits, exacerbating underemployment. <\/li><li><strong>Skill Mismatch: <\/strong>There is often a mismatch between the skills possessed by the labor force and the requirements of available jobs. <\/li><li><strong>Rural-Urban Disparities: <\/strong>Underemployment is more pronounced in rural areas, where seasonal and agriculture-related employment patterns prevail. <\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Government_Initiatives_and_Interventions_to_Address_Underemployment\"><\/span>Government Initiatives and Interventions to Address Underemployment:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\"><li><strong>Skill India Mission:<\/strong> Offers skill training through PMKVY, reducing underemployment by making individuals employable across sectors. <\/li><li><strong>MGNREGA:<\/strong> Guarantees 100 days of wage employment to rural households, reducing underemployment during lean agricultural seasons. <\/li><li><strong>Start-Up India:<\/strong> Promotes entrepreneurship to address underemployment by fostering innovation and economic diversification. <\/li><li><strong>NRLM:<\/strong> Empowers rural populations through skill development, reducing dependence on low-skilled jobs. <\/li><li><strong>PMRPY:<\/strong> Incentivizes formal sector employment, reducing underemployment in the informal sector by reimbursing employer contributions to EPS. <\/li><li><strong>DDU-GKY: <\/strong>Focuses on rural livelihood enhancement through skill development for higher-quality employment opportunities.<\/li><\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Conclusion\"><\/span>Conclusion: <span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Effectively addressing underemployment in India is not just an economic efficiency concern but also a matter of social equity. Through the implementation of robust policies and strategies, India can unlock the full potential of its labor force, promote economic growth, and create a more inclusive and prosperous society.<\/p>\n\n\n\n<figure class=\"wp-block-image size-full\"><a href=\"https:\/\/edukemy.com\/free-resources-for-upsc?utm_source=Blog&amp;utm_medium=Banner&amp;utm_campaign=Resources\" target=\"_blank\" rel=\"noreferrer noopener\"><img decoding=\"async\" width=\"1280\" height=\"300\" data-src=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18.png\" alt=\"\" class=\"wp-image-42398 lazyload\" data-srcset=\"https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18.png 1280w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18-1170x274.png 1170w, https:\/\/edukemy.com\/blog\/wp-content\/uploads\/2024\/06\/18-585x137.png 585w\" data-sizes=\"(max-width: 1280px) 100vw, 1280px\" src=\"data:image\/gif;base64,R0lGODlhAQABAAAAACH5BAEKAAEALAAAAAABAAEAAAICTAEAOw==\" style=\"--smush-placeholder-width: 1280px; --smush-placeholder-aspect-ratio: 1280\/300;\" \/><\/a><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_case_you_still_have_your_doubts_contact_us_on_9811333901\"><\/span><strong>In case you still have your doubts, contact us on 9811333901.<\/strong>&nbsp;<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>For UPSC Prelims Resources,&nbsp;<a href=\"https:\/\/edukemy.com\/upsc-cse-prelims-resource-centre\" target=\"_blank\" rel=\"noreferrer noopener\">Click here<\/a><\/p>\n\n\n\n<p>For Daily Updates and Study Material:<\/p>\n\n\n\n<p>Join our Telegram Channel \u2013&nbsp;<a href=\"https:\/\/t.me\/WithEdukemy4IAS\" target=\"_blank\" rel=\"noreferrer noopener\">Edukemy for IAS<\/a><\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>1. 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