Disguised unemployment is a kind of unemployment in which some people look like being employed but are actually not employed fully. This situation is also known as hidden unemployment. It refers to a situation wherein more people are engaged in a work than required. When the surplus workers from a rural area engaged in the activity or the work, are removed, the production remains unaffected.
In urban areas, there are many people who are employed. Their jobs do not suit their qualifications. Disguised unemployment can be seen in the service sector where painters, repair person, plumber, etc. are doing odd jobs. Many of them do not find work on a daily basis. Taking an example, there is a shop, which require only two persons for handling it, but if there are three servants and one owner to look after the shop, then this shows that two servants are in the situation of disguised unemployment.
In rural areas, disguised employment can be seen in the agricultural sector. Most often, all the members of a family are engaged on the same piece of land. If a few members are withdrawn, there will no effect on the production. So, the members who are withdrawn are in the situation of disguised unemployment.
