UPSC Prelims 2013 · Question 17 of 99

UPSC Prelims 2013 question on Disguised Unemployment

Disguised unemployment generally means:

  1. Large number of people remain unemployed
  2. Alternative employment is not available
  3. Marginal productivity of labour is zero
  4. Productivity of workers is low
Show answer

Answer: C. Marginal productivity of labour is zero

Verdict

Correct Answer: Marginal productivity of labour is zero

Analysis

According to the official UPSC Answer Key for Prelims 2013, the correct option is marginal productivity of labour is zero.

Disguised unemployment occurs when more people are engaged in work than actually required. Even if some workers are removed, total output does not fall.

1. Marginal productivity of labour is zero — Correct

Marginal productivity means the extra output produced by one additional worker.

In disguised unemployment, extra workers do not add to total production.

So, their marginal productivity is zero.

2. Workers appear employed but do not add output — Correct

It is called disguised because people seem to be working, but their contribution to production is negligible or zero.

This is common in small family farms where more family members work than required.

3. Mainly found in agriculture — Correct

Disguised unemployment is most common in the agricultural sector of developing countries like India.

It occurs due to population pressure on land and lack of alternative jobs in industry and services.

Extra UPSC info

* Disguised unemployment is also called hidden unemployment.

* It is common in rural India and family-based farming.

* Surplus labour can be shifted from agriculture to industry without reducing farm output.

* It reflects underemployment, not open unemployment.

* Structural unemployment is due to skill-job mismatch.

* Frictional unemployment occurs when a person is temporarily searching for a new job.

How to crack it

Disguised unemployment means surplus workers are employed, but their marginal productivity is zero because total output remains unchanged even if they are removed.

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