Examkin

Question

Difficulty: MediumDemographic Trends, Employment Types, and Skill Development Programs

Consider the following statements regarding labor market concepts and demographic trends in India:

1. Demographic dividend refers to an economic growth opportunity created when the proportion of the working-age population (15–64 years) exceeds the dependent population.
2. Disguised unemployment is characterized by a scenario where additional workers contribute zero to marginal total output.
3. Frictional unemployment arises primarily from long-term economic shifts that cause a structural mismatch between the skills workers have and the skills employers need.

Which of the statements given above are correct?

  1. 1 and 2 onlyAnswer
  2. B
    2 and 3 only
  3. C
    1 and 3 only
  4. D
    1, 2 and 3

Answer

The correct answer is the option stating that statements 1 and 2 only are correct.
Statements 1 and 2 are accurate. The demographic dividend refers to economic expansion facilitated by a higher proportion of working-age individuals (15–6415\text{--}64 years) compared to dependents. Disguised unemployment occurs when excess labor is employed without increasing total output, meaning marginal labor productivity is zero. Statement 3 is incorrect because skill mismatch is a hallmark of structural unemployment, whereas frictional unemployment is temporary job search time.

Step-by-Step Solution

1
Evaluate Statement 1 regarding demographic dividend definition.
Statement 1 is correct.
Demographic dividend occurs when the demographic transition leads to a high share of working-age population (15–64 years) relative to dependents (below 15 and above 64 years).
2
Evaluate Statement 2 regarding disguised unemployment.
Statement 2 is correct.
In disguised unemployment (commonly seen in Indian agriculture), more workers are engaged than necessary, leading to marginal productivity of labor being virtually zero.
3
Evaluate Statement 3 regarding frictional vs structural unemployment.
Statement 3 is incorrect.
A long-term mismatch between worker skills and job market requirements defines structural unemployment. Frictional unemployment refers to brief periods of unemployment while moving between jobs.

Key Concept

Demographic Dividend and Unemployment Classifications
Rate this question

Topics

Demographic Trends, Employment Types, and Skill Development Programs