- Disguised unemployment means part of the labor force is working redundantly.
- Overall productivity of labor is very less, marginal productivity is zero.
- Impact on Rural Economies:
- Large populations in developing countries create labor surplus.
- Many people are engaged in agriculture, even if their contribution is minimal.
- This leads to low per worker productivity in agriculture.
- It keeps incomes low in rural areas.
- It hinders the shift of workforce to more productive sectors.