Voluntary unemployment
Topic: Employment, Unemployment and Informalisation · NCERT: Beyond NCERT
Meaning
Voluntary unemployment affects people who choose not to work at the prevailing wage, or who prefer to wait for a better job. Jobs are available to them, but they turn them down. In India this is linked to educated youth queuing (waiting in line) for scarce regular or government jobs.
Example
A graduate refuses a low-paid private job and spends two years preparing for a government job. That graduate is voluntarily unemployed.
Don't confuse with
- Involuntary unemployment: the person would accept work at the prevailing wage but cannot find any.
- Discouraged workers: they want a job but have stopped searching, so they are left out of the labour force altogether and are not counted as unemployed.
Related concepts
- Involuntary unemployment
- Frictional unemployment
- Structural unemployment
- Cyclical unemployment
- Technological unemployment
- Natural rate of unemployment
- Hysteresis
- Okun's law
- Efficiency wage
- Labour arbitrage