What do you understand by disguised unemployment? Explain with an example each from the urban and rural areas.

Disguised unemployment is when the number of persons working in a job are more than actually required. For example, if in an agricultural activity, eight people are engaged but this work/activity actually requires the services of five people, then three extra persons come under disguised employment. If these three people out of eight are withdrawn, total production will remain unaffected. Disguised Unemployment is an important feature of a joint family business. In this, more people are visibly employed but are actually unemployed. This is a situation of underemployment, where people are apparently working but all of them are made to work less than their potential. This situation is also known as Hidden Unemployment.
For example: In rural areas, this type of unemployment is generally found in the agricultural sector like – in a family of 9 people all are engaged in the same agricultural plot. But if 4 people are withdrawn from it there will be no reduction in output. So, these 4 people are actually disguisedly employed.
In urban areas, this type of unemployment can be seen mostly in service sectors such as in a family all members are engaged in one petty shop or a small business which can be managed by less number of persons.

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