Disguised Unemployment Disguised unemployment is when people appear to be employed but actually they are not.

It includes potential workers who are not employed but who do not count officially as unemployed because they are not considered part of the civilian labour force. For example, a person able to work but who fails to look for employment or apply for unemployment benefits is considered as part of disguised unemployment. Also, when more people are engaged in some activity than the number of person required for that , this is called disguised unemployment .For example : An agricultural field require 4 labourers but people engaged in this activity is 6 then this unemployment for 2 labours is called disguised unemployment. Thus Disguised unemployment could also include people doing jobs that are completely unproductive, i.e. they get paid but they dont have a job. In a developing economy like China, many workers in agriculture may be adding little if anything to overall unemployment, therefore this type of employment is classed as disguised unemployment. Alternatively, Disguised Unemployment is that does not affect aggregate output. Disguised unemployment exists where part of the labor force is either left without work or is working in a redundant manner where worker productivity is essentially zero. An economy demonstrates disguised unemployment where productivity is low and where too many workers are filling too few jobs. Disguised unemployment exists frequently in developing countries whose large populations create a surplus in the labor force. Where more people are working than is necessary, the overall productivity of each individual drops. Disguised unemployment is characterized by low productivity and frequently accompanies informal labor markets and agricultural labor markets, which can absorb substantial quantities of labor. Also, Disguised unemployment is when people do not have productive full-time employment, but are not counted in the official unemployment statistics. This may include: People on sickness / disability benefits (but, would be able to do some jobs) People doing part-time work. People forced to take early retirement and redundancy

Involuntary Unemployment This is when people are unable to work because there are insufficient jobs available in an economy. For example, during a great depression. Classical economists argue unemployment is voluntary i.e. wages are too high but involuntary unemployment says that people are unemployed for a lack of aggregate demand. Keynes argued a cut in wages would not solve unemployment because it would only reduce AD further. Involuntary unemployment would be measured by government statistics. E.g. in the 1930s, unemployment rose to 25% in the UK. This was involuntary unemployment.