Chapter -7 Employment-Growth, Informalisation and Related Issues


Work stands as a cornerstone in the intricate tapestry of both individual lives and societal structures, serving as a linchpin for multifaceted purposes. Beyond the evident pursuit of economic survival, where individuals strive to earn a livelihood to secure the well-being of themselves and their families, the significance of work transcends monetary considerations. Delving into the realm of psychological well-being, employment emerges as a crucial contributor to an individual’s self-worth and self-esteem, fostering a profound sense of purpose and accomplishment. Moreover, the impact of work extends beyond personal spheres, with each employed person becoming an integral cog in the machinery of national development. Through their collective efforts, individuals contribute to the nation’s income, propelling its growth and advancement and sowing the seeds of progress and prosperity at the societal level. In essence, work emerges not merely as a means of earning a living but as a dynamic force intertwining economic, psychological, and societal dimensions, shaping the destinies of both individuals and the overarching fabric of the nation.


1. Worker:

A worker is an individual engaged in productive employment to sustain their livelihood.

2. Gross Domestic Product (GDP):

GDP is the aggregate value of goods and services produced in an economy within a given year. Workers contribute to GDP by providing their services.

3. Economic Activities:

Economic activities encompass all endeavors contributing to the gross national product through the production of goods and services. Productive activities are a subset of economic activities.

4. Workforce:

Individuals participating in economic activities are termed workers, collectively forming the workforce. Workforce constitutes the total number of actively employed individuals, with employment opportunities shaping the economic landscape.

5. Types of Workers:

(a) Self-Employed:

Individuals operating their own businesses or professions, deriving profits as their income.

(b) Hired Workers:

Individuals employed by others, receiving wages or salaries. Hired workers can be categorized as casual or regular, based on the nature and permanency of their employment.

6. Labour Supply, Labour Force:

Labour supply is the amount of labor available at a specific wage rate. The labor force comprises individuals capable and willing to work. It differs from the workforce, as it includes those willing to work but currently unemployed.

7. Rate of Unemployment:

The rate of unemployment is calculated as the number of unemployed individuals divided by the labor force, multiplied by 100.

8. Workforce Participation Rate:

The participation ratio is determined by dividing the workforce by the total population and multiplying by 100. It signifies the percentage of the population actively contributing to productive activities, providing insight into the employment scenario. A higher ratio indicates a greater proportion of the population engaged in the production of goods and services within a country.

Objective Type Questions

1. What is the primary goal of a worker’s engagement in productive employment?

a) Socializing

b) Sustaining livelihood

c) Entertainment

d) Networking
Answer: b) Sustaining livelihood

2.How is Gross Domestic Product (GDP) defined?

a) Total population of a country

b) Sum of goods and services produced in an economy in a year

c) The average income of workers

d) Number of businesses in operation
Answer: b) Sum of goods and services produced in an economy in a year

3. What do economic activities contribute to in terms of the national economy?

a) Cultural development

b) Population growth

c) Gross Domestic Product (GDP)

d) Political stability
Answer: c) Gross Domestic Product (GDP)

4. Who are classified as self-employed individuals?

a) Those receiving wages or salaries

b) Those operating their own businesses or professions

c) Casual workers

d) Regular salaried employees
Answer: b) Those operating their own businesses or professions

5.How is the Workforce Participation Rate calculated?

a) Workforce divided by GDP

b) Labor force divided by the total population

c) Unemployment rate multiplied by the labor force

d) Self-employed individuals divided by hired workers
Answer: b) Labor force divided by the total population

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