UPSC Prelims Practice Questions — The looming crisis of world unemployment

Q1. With reference to the 'demographic dividend', consider the following statements: Which of the statements given above is/are correct?

  1. Because the dividend arises from a change in age structure, it accrues once fertility falls, whether or not the added working-age people find productive work.
  2. It arises when the labour force grows faster than the population dependent on it, freeing resources for saving and investment.
  3. The window for reaping it is finite, closing as the working-age bulge ages and old-age dependency rises.
  • A. 1 and 3 only
  • B. 1, 2 and 3
  • C. 2 and 3 only
  • D. 1 and 2 only

Q2. With reference to the measurement of youth exclusion from the labour market, consider the following statements: Which of the statements given above is/are correct?

  1. A young person who has stopped looking for work out of discouragement is counted among NEET youth but not among the unemployed.
  2. A young person who is neither studying nor working but is actively seeking a job is counted both among the unemployed and among NEET youth.
  3. The NEET rate is computed as a share of the total youth population, whereas the unemployment rate is computed as a share of the labour force.
  • A. 1, 2 and 3
  • B. 1 and 3 only
  • C. 1 and 2 only
  • D. 2 and 3 only

Q3. According to the ILO, in 2025 the global youth (15–24 years) unemployment rate was 12.4 per cent, or about 67 million young people. The share of youth not in employment, education or training (NEET) was about 20 per cent, or more than 257 million young people. Consider the following inferences: Which of the inferences given above can validly be drawn from these facts?

  1. A large proportion of NEET youth are outside the labour force rather than unemployed.
  2. About 12.4 per cent of all young people aged 15–24 were without a job and actively seeking one.
  3. Roughly four-fifths of young people aged 15–24 were in employment.
  • A. 2 only
  • B. 1 only
  • C. 2 and 3 only
  • D. 1 and 3 only

Q4. With reference to the ILO's decent-work framework and labour statistics, consider the following statements: Which of the statements given above are correct?

  1. In ILO labour statistics, a worker in informal employment without social protection is counted as unemployed.
  2. Social dialogue among governments, employers and workers is one of the pillars of the Decent Work Agenda.
  3. Sustainable Development Goal 8 is limited to full employment, leaving the quality of work outside its scope.
  4. A stable unemployment rate is compatible with a rise in the number of workers holding informal jobs.
  • A. 1 and 3 only
  • B. 1, 2 and 4 only
  • C. 2, 3 and 4 only
  • D. 2 and 4 only

Q5. Consider the following assertion: 'In many developing economies, the youth bulge risks becoming a demographic liability rather than a dividend.' Consider the following statements: Which of the statements given above support/supports the above assertion?

  1. The number of young people reaching working age in developing economies over the coming decade far exceeds the number of jobs projected to be created in that period.
  2. The share of young people neither working nor in education or training has risen in most countries with high youth ratios.
  3. The global unemployment rate is projected to remain steady at 4.9 per cent in 2026.
  • A. 1, 2 and 3
  • B. 1 only
  • C. 1 and 2 only
  • D. 2 and 3 only

Q6. With reference to the institutions of the World Bank Group, consider the following statements: Which of the statements given above are correct?

  1. The International Finance Corporation lends directly to private firms, whereas IBRD and IDA lend to governments.
  2. The International Development Association lends on near-market terms to developing countries with relatively high per capita incomes.
  3. The International Centre for Settlement of Investment Disputes provides facilities for conciliation and arbitration between governments and foreign investors.
  4. The International Bank for Reconstruction and Development is the Group's main lending arm and lends to developing countries with relatively high per capita incomes.
  • A. 1, 2 and 3 only
  • B. 1 and 3 only
  • C. 2 and 4 only
  • D. 1, 3 and 4 only

Q7. Consider the following statements: Which of the following is correct in respect of the above statements?

  1. The International Labour Organization pursues job creation in developing countries chiefly by lending to their governments for employment-generating projects.
  2. International labour standards are adopted by a body in which representatives of employers and workers take part alongside those of governments.
  • A. Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
  • B. Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
  • C. Statement-I is correct, but Statement-II is incorrect
  • D. Statement-I is incorrect, but Statement-II is correct

Q8. Consider the following findings. In many emerging and developing economies, workers are moving from agriculture to services and bypassing manufacturing. Some market services, such as transport, telecommunications and business services, have higher output per worker than manufacturing. The ILO warns that AI and automation could especially hurt educated youth in high-income countries who are seeking their first job in high-skill occupations. Consider the following inferences: Which of the inferences given above can validly be drawn from these findings?

  1. A shrinking share of manufacturing in employment need not by itself lower aggregate productivity growth in a developing economy.
  2. Risks to youth employment from AI and automation are confined to routine, low-skill occupations.
  3. The productivity gains from moving labour out of agriculture depend on which service activities absorb those workers.
  • A. 1 and 3 only
  • B. 1 only
  • C. 2 and 3 only
  • D. 1, 2 and 3