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Wednesday, 4 May 2011

Causes of Unemployment in the less developing countries and suggest measure to remove unemployment

In the advanced countries , the rate of unemployment is low while in the less developing countries rate of unemployment is very high. In the less developing countries disguised unemployment is also found.

1. LACK OF CAPITAL :- The less developing countries are facing the problem of capital shortage. While for the development of any country, there is a need of a huge amount of capital. When new projects , buildings and factories are constructed a large number of people are engaged in these project. So lack of capital is the major cause of unemployment.

2. OVER POPULATION :- In the less developing countries the rate of population growth is 3% per Annam while the natural resources are limited and they can not meet the increasing demand of.

3. SEASONAL VARIATIONS :- There are many industries which produce the goods seasonally like ice factory. These work only month and remain close in the remaining period. So a large number of people who are engaged with these industries become unemployed. Due to inventions, new goods are replacing the old commodities. So the people who are engaged with old industries are unemployed.

4. LACK OF EFFECTIVE DEMAND :- According to keynes when aggregate supply increases than the aggregate demand unemployment prevails. So he stresses that rate of consumption may not fall.

5. LACK OF SKILL :- In the less developing countries, majority the people is uneducated and they have no any skill about any particular job. So they can not get the job.

6. POOR PERFORMANCE OF AGRICULTURE SECTOR :- Under developed countries depends upon the agriculture sector and production of agriculture depends upon nature. Second problem is this that there is subdivision of land. Farmers have very small holdings, neither they can sell it nor they can cultivate. it.

7. TRADE CYCLE :- Some time due to crises unemployment prevails. Because in the period of depression, prices, profits, production and rate of employment falls.


1. INCREASE IN CAPITAL FORMATION :- Government should establish the labour intensive industries to increase the rate of employment.

2. INCENTIVE FOR PRIVATE SECTOR :- Government should provide the liberal concessions bad tax holidays to the private investors to increase the rate of employment.

3. ESTABLISHMENT OF SMALL SCALE INDUSTRY :- In the rural areas small scale industry should be established to remove the disguised unemployment.

4. TECHNICAL TRAINING CENTERS :- Technical and commercial centers should be established to provide training and skill to the public. It will be very useful in curtailing the unemployment.

5. CONTROL ON POPULATION :- There should be an effective check on the population growth. Family planning program should be introduced and population should be reduced according the size of natural resources.

6. INCREASE IN EFFECTIVE DEMAND :- Government should increase the rate of investment by establishing the various industries to increase the rate of employment.

7. EMPLOYMENT EXCHANGE OFFICES :- The offices should be established to provide the proper information's about the employment to the public.

8. MONETARY AND FISCAL POLICY :- Government should frame the above policies in such a manner that maximum chances of employment may be provided to the public.


EZRA MWOGELA 5 April 2013 at 08:14  


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