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

Which of the following statements regarding demographic dividend and employment types in India are correct?

  1. Demographic dividend refers to the economic growth potential that arises when the proportion of the working-age population (15 to 64 years) is higher than the dependent population.Answer
  2. Disguised unemployment is a scenario where more workers are employed in an activity than required, making the marginal productivity of additional labor zero.Answer
  3. C
    Frictional unemployment occurs due to long-term structural shifts in the economy that create a permanent skill mismatch among workers.
  4. D
    Seasonal unemployment is most commonly observed in the formal Information Technology (IT) sector during annual performance cycles.

Answer

The statements defining demographic dividend as a high proportion of working-age population and disguised unemployment as labor engagement with zero marginal productivity are correct.
The statements accurately capture that demographic dividend is driven by an expanded working-age demographic (15-64 years) and that disguised unemployment features surplus labor with zero marginal productivity.

Step-by-Step Solution

1
Evaluate the definition of Demographic Dividend
Confirmed correct: It represents economic growth potential driven by a higher ratio of working-age individuals (15–64 years) relative to dependents.
Demographic transition reduces dependency ratios, allowing greater savings and investments.
2
Evaluate the definition of Disguised Unemployment
Confirmed correct: It refers to hidden unemployment where extra labor contribution yields zero marginal output.
This is a characteristic feature of primary sectors like agriculture in developing economies.
3
Evaluate the statement on Frictional Unemployment
Identified incorrect: Permanent structural skill mismatch defines structural unemployment, whereas frictional unemployment is short-term job search time.
Distinguishing between short-term job search dynamics and long-term structural changes.
4
Evaluate the statement on Seasonal Unemployment
Identified incorrect: Seasonal unemployment affects agro-based and seasonal businesses, not formal corporate IT sectors.
Industry characteristics dictate seasonal work patterns.

Key Concept

Demographic Dividend and Employment Classifications
Estimated Time:1m 0s
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Topics

Demographic Trends, Employment Types, and Skill Development Programs