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Unit 5: Unemployment in India

Notes
Figure 5.2: Employment Change from Manufacturing to Services

Source: http://www.economicsonline.co.uk/Managing_the_economy/Unemployment_types_
and_causes.html
Current changes have shaped two speed economies, with a comparatively buoyant service
sector and a decreasing manufacturing one.
The main reasons are:

Globalisation and the increase of new ‘low cost’ abroad competitor countries.
Increased competition within the domestic product market.
The increasing comparative advantage of the UK as an international supplier of financial
services.

5.5 Structural Unemployment and Labour Mobility

Now let us discuss about the structural unemployment and labour mobility. Labour
motionlessness is expected to raise structural unemployment. These is because those industries
that are growing and need labour, often called sunrise industries, are not unavoidably able to
employ the similar workers who have been displaced in the decreasing, sunset industries.

There are three kinds of labour immobility:
1. Geographical Immobility: Geographical immobility arises when workers are not eager
or able to travel from region to region, or town to town. Geographical mobility was made
worst by enormous house price dissimilarity between areas. It may be tremendously hard
for workforces in Yorkshire to sell their home and buy a comparable one in India.
Other factors also donate to geographical immobility, such as strong social and family
bonds, and parents’ existence reluctant to upset their children’s education by changing
schools. The stresses of moving home can also be a deterrent to mobility for some.
2. Industrial Immobility: Industrial immobility arises when workforces do not travel between
industries, such as moving from employment in motor industry to employment in the
insurance industry. Industrial immobility has exaggerated UK, and many other industrial
countries, as the development of service industries, and the weakening of manufacturing
industries, have augmented the need for mobility.
3. Occupational Immobility: Occupational immobility arises when workforces find it is
problematic to change jobs in an industry. Such as, it may be very challenging for a doctor

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