What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.

Disguised unemployment refers to a kind of employment where people engaged in a work more than requirement. It is also known as hidden unemployment because we can’t see the people employed here are more than required. The situation of disguised unemployment basically arises when more and more people start working at the place where there is less need of more workers.

For example: It can be observed in the rural areas where all the members of a family of a farmer are working in a farm where only 3 members are required but 6 members are working in that field which means the other 3 person working in that farm are unemployed which will be categorized under disguised unemployment. The reason behind their working in the same farm is lack of jobs in urban areas as well as in rural areas. In urban areas also disguised unemployment can be seen in the service sectors.