Unemployment

Unemployment


According to the World Social Security Report 2010/11: Providing coverage in times of crisis and beyond, which has been produced by the International Labour Organization (ILO), http://www.ilo.org/wcmsp5/groups/public/---dgreports/---dc
omm/---publ/documents/publication/wcms_146566.pdf
:  


•    The notion of social security used in this report has two main (functional) dimensions, namely “income security” and “availability of medical care”.

•    Only one-third of countries globally (inhabited by 28 per cent of the global population) have comprehensive social protection systems covering all branches of social security (plus social assistance) as defined in Convention No. 102 and Recommendation No. 67.

•    It is estimated that only about 20 per cent of the world’s working-age population (and their families) have effective access to comprehensive social protection systems.

•    Although a larger percentage of the world’s population has access to health-care services than to various cash benefits, nearly one-third has no access to any health facilities or services at all.

•    Many people in countries such as Cambodia, India and Pakistan shoulder up to 80 per cent of total health expenditures, with only a small portion of the population being covered by any form of social health protection mechanisms providing medical benefits such as tax-funded services or social, national or community-based insurances. High out-of-pocket payments are a major cause of impoverishment, and so it is not accidental that there is a strong correlation between the shares of out-of-pocket expenditure in a country and poverty incidence there.

•    30–36 per cent of the world’s population has no access to the services of an adequate number of skilled medical professionals. Low-income countries in Africa and Asia show the highest levels of access deficits.

•    In low-income countries no more than 35 per cent of all women in rural areas have access to professional health services, while in urban areas the access rate amounts to an average of about 70 per cent, which is still more than 20 percentage points lower than the access in high-income countries (where it is nearly complete).

•    Coverage by old-age pension schemes around the world, apart from in the developed countries, is concentrated on formal sector employees, mainly in the civil service and larger enterprises. The highest coverage is found in North America and Europe, the lowest in Asia and Africa.

•    India’s National Old-Age Pension Scheme, financed by central and state resources, reaches one-fourth of all the elderly: about half of pensioners who live in poverty. And in Brazil, social assistance pensions lift about 14 million people out of extreme poverty. A newly introduced social security scheme helped the Republic of Korea to adjust more smoothly to the Asian financial crisis of the late 1990s.

•    Worldwide, nearly 40 per cent of the population of working age is legally covered by contributory old-age pension schemes. In North America and Europe this number is nearly twice as high, while in Africa less than one-third of the working-age population is covered even by legislation. Effective coverage is significantly lower than legal coverage. With the exception of North America and to a lesser extent Western Europe, effective coverage is quite low in all regions. In sub-Saharan Africa only 5 per cent of the working-age population is effectively covered by contributory programmes, while this share is about 20 per cent in Asia, the Middle East and North Africa.

•    While in high-income countries 75 percent of persons aged 65 or over are receiving some kind of pension, in low-income countries less than 20 per cent of the elderly receive pension benefits.

•    Present entitlements to unemployment benefits tend to be restricted to those in formal employment, and exist mostly in high- and middle-income countries. Of 184 countries studied, statutory unemployment social security schemes exist in only 78 countries (42 per cent), often covering only a minority of their labour force. Coverage rates in terms of the proportion of unemployed who receive benefits are lowest in Africa, Asia and the Middle East (less than 10 per cent).

•    In the informal economy prevailing in many low income countries, conditions and safety of work are often dramatically bad, accidents and work-related diseases widespread and with no protection at all for their victims. Globally, estimated legal coverage represents less than 30 per cent of the working-age population, which is less than 40 per cent of the economically active.

•    On average, 17.2 per cent of global GDP is allocated to social security. However, these expenditures tend to be concentrated in higher-income countries.

•    Unemployment insurance schemes are in place in only 64 of the 184 countries for which information is available. Social assistance, public works and similar programmes also have very limited coverage globally.

•    Globally slightly over a quarter of the world’s adult population (one-third of adult men and one-fifth of adult women) is employed, whether formally or informally, as employees. If one looks only at those who have some kind of employment, less than half globally have the status of wage or salary workers. However, while in developed economies nearly 85 per cent of all employed are employees, the figure is not much more than 20 per cent in South Asia and sub-Saharan Africa, less than 40 per cent in South-East Asia and the Pacific, slightly more than 40 per cent in  East Asia and about 60 per cent in North Africa, the Middle East and Latin America and the Caribbean – but not all of them are in formal employment and thus have access to statutory social security benefits.

•    People without social security coverage in developing countries usually work in the informal rather than the formal economy. No access to social security coverage is usually part of the definition of informal employment.

•    In large parts of Africa, Asia and Latin America a minority of employed people are employees. In many African and South-East Asian countries especially less than 30 per cent of the employed work as wage workers.

•    In Asia, Africa and some parts of Latin America, there are large gaps in the scope of social security schemes legally available to at least certain groups of workers.

•    In Africa, North and Latin America, the Middle East and CIS public health-care financing comes mainly from general taxation, while in Asia and Central and Eastern Europe social insurance financing dominates.

•    The allocation for the NREGS programme in India from the national budget for the financial year 2006–07 was 0.3 per cent of GDP. Official cost estimates of the scheme, once fully operational; suggest that the budget could peak at 1.5 per cent of GDP. The programme is regarded as one of the largest rights-based social protection initiatives in the world, reaching around 40 million households living below the poverty line.



The Report titled Employment and Unemployment Situation in India, 2007-08 by National Sample Survey (NSS), MoSPI, Govt. of India is (
http://mospi.gov.in/NSS_Press_note_531_25may10.pdf) based on the household survey on Employment and Unemployment & Migration Particulars conducted in its 64th round. The field work of the nationwide survey was carried out during July 2007 to June 2008. The survey covered a random sample of 5,72,254 persons, from 79,091 rural households and 46,487 urban households spread over 7921 villages and 4668 urban blocks in the country. The Report states that:

A. Household and Population Characteristics

  • About 72 per cent of the households belonged to rural India and accounted for nearly 74 per cent of the total population.
  • Average household size in India was 4.5. The rural household size (4.7) was slightly higher than urban household size (4.2).


B. Labour Force and Work Force

  • According to the usual status (ps+ss), 41 per cent of population belonged to the labour force. This proportion was 43 per cent for rural and 37 per cent for urban areas.
  • The labour force participation rate (LFPR) was about 56 per cent of rural males and 29 per cent of rural females. The corresponding proportions in the urban areas were 58 per cent and 15 per cent, respectively.
  • About 40 per cent of the population in the country were employed according usual status (ps+ss). The worker population ratio (WPR) was about 42 per cent in the rural areas and 35 per cent in the urban areas.
  • The male WPR in both the rural and urban areas were considerably higher than female WPR. In both the rural and urban areas, male WPR was nearly 55 per cent. Compared to this, the female WPR was 29 per cent in rural areas and 14 per cent in urban areas.
  • The WPRs obtained according to current daily status were lower than those obtained in the current weekly status, which, in turn, were lower than those according to usual status rates: WPR in India, was 34 per cent as per current daily status, 37 per cent according to current weekly status, and it was 40 per cent according to usual status.
  • Between 2004-2005 and 2007-08, in both rural and urban areas, WPR for males in usual status (ps+ss) remained unchanged at 55 per cent. However, for females, it decreased by about 4 percentage points for rural areas (from 33 per cent to 29 per cent) and about 3 percentage points for urban areas (from 17 per cent to 14 per cent).
  • In rural India, among the usually employed (ps+ss), about 67 per cent of males and 84 per cent of females were engaged in agriculture sector. The corresponding figures in 1977-78 were 81 per cent and 88 per cent, respectively.
  • In urban India, the ‘trade, hotel and restaurant’ sector engaged about 28 per cent of the male workers, while in ‘manufacturing’ nearly 24 per cent of the male workers were engaged. For urban females, ‘other services’ sector accounted for the highest proportion (38 per cent) of workers, followed by manufacturing (28 per cent) and agriculture (15 per cent).
  • Considerable gender differentials in the wage rates (per day) for regular wage/salaried employees were observed. The average wage rate for regular wage/salaried employees, of age 15-59 years, in rural areas was 175.30 for males and Rs. 108.14 for females and in the urban areas, wage rate for males was Rs. 276.04 against Rs. 212.86 for females.
  • In the rural areas, average male wage rate (of workers of age 15-59 years) for casual labour other than MGNREG public works was Rs. 76.02 and it was Rs. 70.66 for females.
  • There was no gender differential in wage rate for casual labour in MGNREG public works, the wage rate (of workers of age 15-59 years) was nearly Rs. 79.00 for both rural male and rural female.
  • In the rural sector, on an average, Rs. 66.59 was earned in a day by a male casual labourer (of age 15-59 years) engaged in casual labours other than public works, whereas a female casual labourer earned Rs. 48.41 a day – showing a difference of about Rs. 18. In the urban areas, a male casual labourer engaged in works other than public works earned Rs. 86.58 in a day and a female, Rs. 51.34 in a day.


C. Unemployment Rate

  • At the all-India level, unemployment rate was nearly 8 per cent in the current daily status approach. The unemployment rate stood at nearly 4 per cent in current weekly status approach and 2 per cent in the usual status approach, i.e., in usual (adjusted.).
  • In the rural areas, female unemployment rate stood at 8 per cent in current daily status compared to 9 per cent for males while in the urban areas, female unemployment rate in the current daily status was nearly 10 for cent which was 3 percentage point higher compared to male unemployment rate.


D. Underemployment

  • The proportion of usually employed males (ps+ss) who are found to be not employed (unemployed+not in the labour force) during the week preceding the date of survey (current weekly status) was 4 per cent in the rural and 2 per cent in the urban areas. The proportion of usually employed females (ps+ss) not employed (unemployed+ not in the labour force) during the week preceding the date of survey was as high as 19 per cent in the rural and 7 per cent in urban areas.
  • The proportion of person-days without work (unemployed+ not in the labour force) of the usually employed (ps+ss) was about 36 per cent and 19 per cent for females in rural and urban areas respectively as against 11 per cent and 5 per cent for males in rural and urban areas respectively.
  • The percentage of person-days on which persons with some work during the reference week (according to the current weekly status) were without work (unemployed+not in the labour force) was about 7 for rural males, 21 per rural females, 3 for urban males and 12 for urban females.


Note:

Labour Force Participation Rate (LFPR) is obtained by dividing the number of persons in the labour force by total population

Usual Principal Status: The labour force is typically measured through the usual principal activity status (UPS) which reflects the status of an individual over a reference period of one year. Thus, a person is classified as belonging to labour force, if s/he had been either working or looking for work during longer part of the 365 days preceding the survey. The UPS measure excludes from the labour force all those who are employed and/or unemployed for a total of less than six months. Thus persons who work intermittently, either because of the pattern of work in the household farm or enterprise or due to economic compulsions and other reasons, would not be included in the labour force unless their days at work and unemployment totalled over half the reference year.

Usual Principal and Subsidiary Status: The Usual Principal and Subsidiary Status (UPSS) concept was introduced to widen the UPS concept to include even those who were outside the labour force on the basis of the majority time criterion but had been employed during some part of the year on a usual basis. In the NSS 61st Round Survey, all those who were either un-employed or out of labour force but had worked for at least 30 days over the reference year were treated as subsidiary status workers. UPSS is thus a hybrid concept incorporating both the major time criterion and priority to work status.

The UPSS measure was used on the ground that it was stable and inclusive: it related to a picture emerging from a long reference period, and even persons working for 30 days or more, but not working for the major part of the year, were included. However, those outside the UPS labour force, seeking or available for work for more than 30 days during the preceding 365 days, were not included in the UPSS labour force.

Current Weekly Status: The concept of Current Weekly Status (CWS) has been in use in the labour force surveys in India even before 1970, when the recommendations of the Dantwala Committee became available. It was primarily because the agencies like International Labour Organization (ILO) use estimates of employment and unemployment rates based on weekly reference period for international comparisons. Under CWS, a person is classified to be in labour force, if s/he has either worked or is seeking and/ or available for work at least one hour during the reference period of one week preceding the date of survey. The CWS participation rates also relate to persons and hence may be roughly compared with those obtained by using UPS and UPSS measurements. However, the reference periods are different and UPS, unlike UPSS and CWS, is based on majority time and does not accord priority to work and unemployment.

Current Daily Status: The Dantwala Committee proposed the use of Current Daily Status (CDS) rates for studying intensity of work. These are computed on the basis of the information on employment and unemployment recorded for the 14 half days of the reference week. The employment statuses during the seven days are recorded in terms of half or full intensities. An hour or more but less than four hours is taken as half intensity and four hours or more is taken as full intensity. An advantage of this approach was that it was based on more complete information; it embodied the time utilisation, and did not accord priority to labour force over outside the labour force or work over unemployment, except in marginal cases. A disadvantage was that it related to person-days, not persons.

 


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