Differentiate between:

Formal and Informal Sector.

Seasonal and Disguised Unemployment.

Q: Differentiate between: 1. Formal and Informal Sector. 2. Seasonal and Disguised Unemployment.

1. Formal and Informal Sector: S. No. Basic Formal Sector Informal sector 1. Meaning Those establishments which employ 10 or more workers are called formal sector establishments. Those establishments which employ less than 10 workers are called Informal sector establishments. 2. Caontact There is a written contract between employer and employee which mentions all the terms and conditions of employment. There is no written contract between employer and employee. 3. Job Security Workers in formal sector have a job security. Workers in informal sector have no job security. They may be fired anytime. 4. Other benefit Workers in formal sector enjoy many other benefits like paid leave, maternity benefits, provident fund etc. Workers in informal sector do not get any such benefit. 2. Seasonal and Disguised Unemployment: S. No. Basic Seasonal Unemployment Disguised Unemployment 1. Meaning When a person does not get job in a particular season i.e. during some part of the year, it is called seasonal unemployment. When a person seems to be employed but is actually contributing nothing to total output, he is called disguised or hidden unemployment. 2. Example from Rural Area Farmers getting unemployed during off season. A family of 8 is working in a field where only 6 people are required. 3. Example from Urban area An ice cream seller getting no work during winter season. A person helping his father in shop but is actually not required.

Question

Differentiate between:

Formal and Informal Sector.
Seasonal and Disguised Unemployment.

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Solution

Formal and Informal Sector:

S. No.	Basic	Formal Sector	Informal sector
1.	Meaning	Those establishments which employ 10 or more workers are called formal sector establishments.	Those establishments which employ less than 10 workers are called Informal sector establishments.
2.	Caontact	There is a written contract between employer and employee which mentions all the terms and conditions of employment.	There is no written contract between employer and employee.
3.	Job Security	Workers in formal sector have a job security.	Workers in informal sector have no job security. They may be fired anytime.
4.	Other benefit	Workers in formal sector enjoy many other benefits like paid leave, maternity benefits, provident fund etc.	Workers in informal sector do not get any such benefit.

Seasonal and Disguised Unemployment:

S. No.	Basic	Seasonal Unemployment	Disguised Unemployment
1.	Meaning	When a person does not get job in a particular season i.e. during some part of the year, it is called seasonal unemployment.	When a person seems to be employed but is actually contributing nothing to total output, he is called disguised or hidden unemployment.
2.	Example from Rural Area	Farmers getting unemployed during off season.	A family of 8 is working in a field where only 6 people are required.
3.	Example from Urban area	An ice cream seller getting no work during winter season.	A person helping his father in shop but is actually not required.

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