Question

3. What is the definition of underemployment that is adopted in Afghanistan? How different is it from the national definition of unemployment?

Hint: the definition for underemployment is given in the same source/report indicated previously.

Answer 1

In Afghanistan, under employment in terms of time, income, recognition dimension significantly increased over the recent past as growth in output and employment, particularly in the formal sector fell far short of growth in labour force.

Unemployment occurs when a person who is actively searching for employment is unable to find work. High unemployment indicates the economy is operating below full capacity and is inefficient, this will lead to lower output and incomes. The unemployed are also unable to purchase as many goods, so will contribute to lower spending and lower output. A rise in unemployment can cause a negative multiplier effect.