Page 73 - DECO303_INDIAN_ECONOMY_ENGLISH

Indian Economy

Notes to retrain to be a dentist. Industrial and occupation immobility are utmost probable to
take place when skills are not transportable between industry and job.
Information failure also contributes to labour motionlessness because workers may be
immobile since they do not know where all the appropriate jobs for them are.
A subsequent problem with labour market immobility is that it can make local
unemployment, which is a type of structural immobility. This means that a modification
in the structure of industry leaves particular people not capable to answer by changing
job, industry, or location and as an outcome, they remain for the time being or permanently
unemployed.
Immobility can also lead to increasing labour costs, as companies have to upturn salaries
to inspire workers to re-locate.

5.6 Labour Market or Government Failure

In this section, you will learn about the labour market or government failure. New Classical
economists would lean towards structural unemployment as an example of government failure.
Labour markets do not clear, they claim, because salaries are not acceptable to adjust efficiently,
and the price mechanism is one-sided. By eliminating distortions and inadequacies in the labour
market workers would move further rapidly from job to job.

Example: By keeping welfare profits to a lowest there is an encouragement to re-educate
and look for remunerated work. Welfare benefits can setup individuals into a life of
unemployment as the effects of moral threat and the hindrance it creates. This increases labour
immobility, and therefore contributes to structural unemployment.
However, labour immobility can also be talked from the viewpoint of labour market failure.
Training and re-training are looked upon as merit goods, where individuals perceive the long
term advantage to themselves. They also fail to escalate the positive externalities that exercise
and re-training make for the wider community. This means that there is an important role for
the state in providing free or subsidised training and retraining programmes.

5.7 Measures taken by the State

Some of the measures taken by the State have been appended as follows:
1. The State is inspiring labour-intensive industry so that additional individuals could be
employed.
2. The importance is being given to agriculture, agro-based industries and cottage industries.
The small scale businesses also fall under this group.
3. A number of employment programmes have been introduced IRDP’ JRY’ HRY’ SEPVP are
some of the leading programmes by the government.

4. Professional education is being stressed upon to remove the unemployment threat. A
young graduate, who has studied Shakespeare, world do no good in an office, which
assumes to be familiar with Microsoft Windows 98, word-processing and competent file
handling.
That is why, the graduate migrant, can find jobs merely as peons in the metropolises.
Vocational education can make them expert at one specific skill so that they could start
donating from day one.

68 LOVELY PROFESSIONAL UNIVERSITY