Question

what is disguised unemployment ? how would you measure it ? would you agree that there may be underemployment of not only labour but also capital (machine) ?

Answer 1

Disguised unemployment is a kind of Hidden unemployment in which there are people who are visibly employed but are actually unemployed. In such situation more people are engaged in a work than required.

Disguised unemployment can be measured through statistical methods in different countries but you can also measure at local level . Disguised unemployment can be measured by measuring the productive efficiency of a firm. The total no of labour can be removed from farms without reducing the total output level. So these extra labour units are in disguised unemployment.

Yes, I agreed that there may be underemployment in machines due lack of upgradation, due to lack of information for operator who is not able to use the proper utility of the machines.