The nature of unemployment can differ in developed and developing economies.
Unemployment in developed countries:
Generally in developing countries the changes in trade cycles decrease the demand which then results in unemployment. Such an unemployment remains for short term. As a result, developed countries mostly witness cyclical and frictional unemployment. This can be solved by increasing effective demand.
Unemployment in developing countries:
- The labour supply constantly increases in developing countries like India that has huge population. On the contrary, because of structural limitations in our economy employment rises at a low rate. This gives rise to problem of long term unemployment.
- Hence, unemployment in developing countries can be solved by introducing economic, social and political changes and by developing extensive infra¬structural facilities.
