What is disguised unemployment?

Disguised unemployment is also called as hidden unemployment.

1. In this disguised unemployment, people are employed but are not allocated work according to their full potential.

2. In this case, the productivity of the industry is not affected even if some people leave their jobs.

3. For example, in rural areas, all the members of a family may be working on a farm in which there is no work for all. In urban areas, all the members of a family may be involved in running a small shop in which there is actually a need for only two or three.

In these cases, even though all the members do not have work, it may seem that they are really working.