1. Meaning: Disguised unemployment is a situation in which more people are employed on a piece of work than are actually required for it; the extra people do not add anything to the total output. 2. Hidden nature: Apparently all of them look busy and employed, but in reality some of them are unemployed - their contribution to production is zero. That is why it is also called hidden or under-employment. 3. Example in agriculture: In a family of eight members, all of them work on a small farm of two hectares. The work actually requires only three or four persons. If four members are removed from the farm and shifted elsewhere, the production on the farm will NOT fall - so those four persons are disguisedly unemployed. 4. In urban areas: It is also found in service activities - for example, a small shop, a repair shop or a street vending business run by the whole family where only one or two persons are really needed. 5. Effect: The income of the family remains the same but is shared among more people, so the income per person remains very low.