Class 11 Economics Notes Chapter 6: Employment – Growth, Informalisation and Other Issues

Introduction

Employment plays an important role in the economic development of a country. People work to earn a living and support their families. Employment also gives individuals a sense of dignity and contributes to national income. Studying employment helps us understand how human resources are used and the challenges faced by workers.

Workers and Employment

Economic Activities

Activities that contribute to the production of goods and services and add to national income are called economic activities.

Examples

Farming
Manufacturing
Transport services
Banking
Teaching
Business activities

Who is a Worker?

A worker is a person engaged in an economic activity that contributes to the production of goods and services.

Workers include:

Farmers
Labourers
Teachers
Shopkeepers
Doctors
Self-employed persons

Both paid workers and self-employed individuals are considered workers.

Workforce

The workforce refers to all people who are engaged in economic activities.

India has one of the largest workforces in the world. A large proportion of workers live in rural areas because agriculture remains an important occupation.

Features of India’s Workforce

Rural workforce is larger than urban workforce.
Men form the majority of workers.
Women’s participation in employment is comparatively lower.
Agriculture remains a major source of employment.

Worker-Population Ratio

Meaning

Worker-Population Ratio is the percentage of total population that is working.

Formula

Worker-Population Ratio

= (Number of Workers ÷ Total Population) × 100

Importance

It helps to:

Measure employment participation.
Compare employment levels across regions.
Assess labour utilisation in the economy.

A higher ratio indicates greater participation in economic activities.

Participation of Men and Women in Employment

Men

Higher participation in economic activities.
Found in all sectors of the economy.

Women

Lower participation rate compared to men.
Many women perform household work that is not counted as employment.
Rural women participate more in economic activities than urban women.

Reasons for Lower Female Participation

Household responsibilities
Social customs
Lack of opportunities
Underreporting of unpaid work

Types of Workers

1. Self-Employed Workers

People who run their own business or occupation are called self-employed workers.

Examples

Farmers
Shopkeepers
Street vendors
Lawyers
Doctors

Self-employment is the largest source of livelihood in India.

2. Regular Salaried Employees

Workers who receive fixed salaries regularly from employers.

Examples

Teachers
Bank employees
Government officials
Office workers

These workers generally enjoy job security and benefits.

3. Casual Wage Labourers

Workers hired on a temporary or daily basis.

Examples

Construction workers
Agricultural labourers
Daily wage workers

Characteristics:

No job security
Irregular income
Vulnerable working conditions

Employment by Sectors

Economic activities are divided into three sectors.

Primary Sector

Activities directly related to natural resources.

Examples

Agriculture
Forestry
Fishing
Mining

This sector provides employment to the largest number of workers in India.

Secondary Sector

Activities related to manufacturing and construction.

Examples

Factories
Manufacturing units
Construction work

This sector transforms raw materials into finished goods.

Tertiary (Service) Sector

Provides services to individuals and businesses.

Examples

Banking
Education
Healthcare
Transport
Communication

The service sector is growing rapidly and creating new employment opportunities.

Growth and Changing Structure of Employment

Over the years, India’s economy has grown significantly.

Major Changes

Decline in Agricultural Employment

The share of workers in agriculture has gradually decreased.

Rise of Industry and Services

More workers are now employed in:

Manufacturing
Construction
Trade
Banking
Information Technology

Growth of Service Sector

The service sector has become one of the fastest-growing sectors in India.

Jobless Growth

Meaning

Jobless growth refers to a situation where the economy grows and production increases, but employment opportunities do not increase proportionately.

Causes

Automation
Use of advanced technology
Increased productivity with fewer workers

Impact

Rising unemployment
Income inequality
Economic insecurity

Casualisation of Workforce

Meaning

Casualisation refers to the increasing proportion of workers employed as casual wage labourers.

Features

Temporary employment
Lack of social security
Uncertain earnings

Effects

Greater vulnerability
Low income security
Poor working conditions

Formal and Informal Sectors

Formal Sector

The formal sector includes government and registered private organisations.

Features

Fixed salary
Job security
Pension benefits
Provident fund
Medical facilities
Legal protection

Examples

Government departments
Public sector companies
Large private firms

Informal Sector

The informal sector includes small and unregistered enterprises.

Features

Irregular income
No social security
No job security
Limited legal protection

Examples

Street vendors
Small shop owners
Domestic workers
Agricultural labourers

Most Indian workers are employed in the informal sector.

Informalisation of Workforce

Meaning

Informalisation refers to the increase in employment in the informal sector.

Reasons

Slow growth of formal jobs
Expansion of small enterprises
Outsourcing of work

Problems

Lack of job security
Low wages
Absence of social benefits

Unemployment

Meaning

Unemployment is a situation in which a person is willing and able to work but cannot find suitable employment.

Types of Unemployment

1. Open Unemployment

When a person is willing to work but cannot find any job.

Example

A graduate searching for a job but remaining unemployed.

2. Disguised Unemployment

When more workers are employed than actually required.

Example

Five people working on a farm where only three are needed.

If some workers leave, production remains unchanged.

Common in:

Agriculture
Rural areas

3. Seasonal Unemployment

Occurs when work is available only during certain seasons.

Example

Agricultural workers getting employment only during sowing and harvesting seasons.

Common in:

Agriculture
Tourism
Sugar industries

Government and Employment Generation

The government plays an important role in creating employment opportunities.

Direct Employment

Government directly employs workers in:

Schools
Hospitals
Railways
Public sector enterprises
Administrative departments

Indirect Employment

Government creates employment indirectly by:

Building roads
Constructing dams
Developing infrastructure
Supporting industries
Promoting rural development

Employment Generation Programmes

Various government programmes aim to create jobs and improve living standards.

Objectives

Reduce poverty
Increase rural employment
Develop infrastructure
Improve social welfare

Areas Covered

Rural roads
Housing
Drinking water
Education
Health services
Community assets

Outsourcing and New Employment Trends

Modern technology has changed the nature of work.

Outsourcing

Large companies assign specific work to smaller firms or individuals.

Examples

Software development
Customer support
Data processing
Accounting services

Benefits

Lower costs
Increased efficiency

Challenges

Less job security
More temporary jobs

Key Terms

Term	Meaning
Worker	Person engaged in economic activity
Workforce	Total number of workers
Worker-Population Ratio	Percentage of population working
Self-employed	Owns and operates own business
Casual Labourer	Temporary worker paid wages
Formal Sector	Organised sector with job security
Informal Sector	Unorganised sector with little protection
Jobless Growth	Economic growth without adequate job creation
Casualisation	Increase in casual employment
Open Unemployment	No work available despite willingness
Disguised Unemployment	More workers than required
Seasonal Unemployment	Employment available only in certain seasons

Chapter Summary

Employment contributes to economic development.
Workers include all persons engaged in economic activities.
Worker-population ratio measures employment participation.
Self-employment is the largest source of livelihood in India.
Agriculture remains the largest employer.
Service sector employment is increasing rapidly.
Economic growth has not always created enough jobs, leading to jobless growth.
Most Indian workers are employed in the informal sector.
Disguised and seasonal unemployment are common in rural India.
Government generates employment through various programmes and development activities.
Modern technology and outsourcing have changed the nature of employment.

Comprehensive Question Bank

Part A: Multiple Choice Questions (MCQs)

1. Activities that contribute to national income are called:

a) Social activities
b) Economic activities
c) Personal activities
d) Cultural activities

Answer: b

2. A person engaged in an economic activity is called:

a) Consumer
b) Worker
c) Employer
d) Investor

Answer: b

3. Worker-population ratio indicates:

a) Number of unemployed persons
b) Number of industries
c) Proportion of workers in total population
d) Population growth

Answer: c

4. Which sector employs the largest workforce in India?

a) Primary sector
b) Secondary sector
c) Service sector
d) Foreign sector

Answer: a

5. A farmer cultivating his own land is:

a) Casual worker
b) Regular employee
c) Self-employed
d) Unemployed

Answer: c

6. A teacher receiving a monthly salary is:

a) Casual labourer
b) Self-employed
c) Regular salaried employee
d) Seasonal worker

Answer: c

7. Daily wage construction workers belong to:

a) Casual labour
b) Self-employment
c) Formal employment
d) Government employment

Answer: a

8. Which sector includes manufacturing activities?

a) Primary
b) Secondary
c) Tertiary
d) Foreign

Answer: b

9. Banking services belong to:

a) Primary sector
b) Secondary sector
c) Tertiary sector
d) Agricultural sector

Answer: c

10. Growth in GDP without sufficient job creation is called:

a) Inclusive growth
b) Jobless growth
c) Economic growth
d) Industrial growth

Answer: b

11. Increasing dependence on casual wage work is known as:

a) Formalisation
b) Casualisation
c) Privatisation
d) Urbanisation

Answer: b

12. Which of the following provides job security?

a) Informal sector
b) Casual work
c) Formal sector
d) Seasonal work

Answer: c

13. Informal sector enterprises are generally:

a) Large and registered
b) Small and unregistered
c) Government-owned
d) Multinational

Answer: b

14. Workers in the informal sector usually lack:

a) Skills
b) Education
c) Social security
d) Experience

Answer: c

15. Which type of unemployment is common in agriculture?

a) Technological
b) Disguised
c) Frictional
d) Cyclical

Answer: b

16. Seasonal unemployment is mainly found in:

a) Agriculture
b) Banking
c) Railways
d) IT sector

Answer: a

17. Open unemployment means:

a) Hidden unemployment
b) No work despite willingness to work
c) Working less than capacity
d) Temporary leave

Answer: b

18. MGNREGA guarantees employment in:

a) Urban areas
b) Industrial areas
c) Rural areas
d) Export zones

Answer: c

19. Outsourcing refers to:

a) Increasing taxes
b) Importing goods
c) Assigning work to outside agencies
d) Closing industries

Answer: c

20. Which sector is growing rapidly in India?

a) Agriculture
b) Mining
c) Service sector
d) Forestry

Answer: c

Part B: Fill in the Blanks

Economic activities contribute to __________ income.
Answer: national
A person engaged in an economic activity is called a __________.
Answer: worker
The percentage of workers in total population is called __________ ratio.
Answer: worker-population
Farmers working on their own land are __________ employed.
Answer: self
Construction labourers are usually __________ wage labourers.
Answer: casual
Manufacturing belongs to the __________ sector.
Answer: secondary
Banking belongs to the __________ sector.
Answer: service
Growth without adequate employment generation is called __________ growth.
Answer: jobless
The organised sector is also known as the __________ sector.
Answer: formal
Most Indian workers are employed in the __________ sector.
Answer: informal
Disguised unemployment is common in __________.
Answer: agriculture
Employment available only during specific periods is called __________ unemployment.
Answer: seasonal
Workers in the formal sector enjoy __________ security benefits.
Answer: social
MGNREGA provides guaranteed employment in __________ areas.
Answer: rural
Outsourcing has increased due to advances in __________.
Answer: technology

Part C: True or False

All workers are salaried employees.
False
Self-employed persons are workers.
True
Worker-population ratio measures employment participation.
True
Agriculture belongs to the tertiary sector.
False
Informal workers enjoy greater social security.
False
Casual labourers usually have job security.
False
Service sector employment has increased over time.
True
Disguised unemployment is common in rural India.
True
Formal sector workers generally receive benefits.
True
Government can generate employment directly and indirectly.
True

Part D: Match the Following

Column A	Column B
Worker-population ratio	Employment participation
Self-employed	Own business
Casual labourer	Daily wage worker
Formal sector	Social security
Informal sector	Unregistered enterprise
Agriculture	Primary sector
Manufacturing	Secondary sector
Banking	Service sector
Jobless growth	GDP growth without jobs
MGNREGA	Rural employment

Part E: One Word Answer Questions

Percentage of workers in total population.
Worker-population ratio
Person running own business.
Self-employed
Sector with social security benefits.
Formal sector
Unemployment hidden in agriculture.
Disguised unemployment
Employment available only during certain seasons.
Seasonal unemployment
Growth without jobs.
Jobless growth
Temporary worker paid daily wages.
Casual labourer
Largest employment provider in India.
Agriculture
Process of increasing casual employment.
Casualisation
Government employment scheme guaranteeing 100 days of work.
MGNREGA

Part F: Assertion and Reason Questions