Unemployment

Unemployment

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As per the report entitled State of Working India 2019 (please click here to access), which has been prepared by Centre for Sustainable Employment, Azim Premji University:

• In the present report an update on the jobs situation for the period between 2016 and 2018 is presented along with some ideas for employment generation.

• The first few months of 2019 have been unusually eventful for labour economists and statisticians in India. The ongoing controversy over job creation received a fresh impetus early in the new year with Somesh Jha's Business Standard exposé of a new National Sample Survey Office (NSSO) report on employment. Jha reported the ‘leaked’ findings of the newly instituted Periodic Labour Force Survey (PLFS), which showed that unemployment rates had risen to an all-time high of 6.1 percent in 2017-2018.

• India’s labour statistics system is in transition. The five-yearly employment-unemployment surveys conducted by the National Sample Survey Office (NSS-EUS), the last of which was in 2011-12, have been discontinued. The annual surveys conducted by the Labour Bureau (LB-EUS) have also been discontinued. The last available survey in this series is from 2015.

• The current NDA government has not released the results of the last Labour Bureau survey (2016-17), nor the results of the new high frequency Periodic Labour Force Survey (PLFS) conducted by the NSSO, both of which have been cleared by the concerned authorities for public release. Thus we do not have official employment numbers based on nationally representative household surveys after 2015-16.

• In the absence of official survey data, the report has used data from the Consumer Pyramids Survey of the Centre for Monitoring the Indian Economy (CMIE-CPDX) to understand the employment situation between 2016 and 2018.

• CMIE-CPDX is a nationally representative survey that covers about 160,000 households and 522,000 individuals and is conducted in three ‘waves’, each spanning four months, beginning from January of every year. An employment-unemployment module was added to this survey in 2016.

• Analysis of CMIE-CPDX reveals that five million men lost their jobs between 2016 and 2018, the beginning of the decline in jobs coinciding with demonetisation in November 2016, although no direct causal relationship can be established based only on these trends.

• Analysis also reveals that unemployment, in general, has risen steadily post 2011. Both the PLFS and the CMIE-CPDX report the overall unemployment rate to be around 6 per cent in 2018, double of what it was in the decade from 2000 to 2011.

• India's unemployed are mostly the higher educated and the young. Among urban women, graduates are 10 per cent of the working age population but 34 percent of the unemployed. The age group 20-24 years is hugely over-represented among the unemployed. Among urban men, for example, this age group accounts for 13.5 per cent of the working age population but 60 percent of the unemployed.

• In addition to rising open unemployment among the higher educated, the less educated (and likely, informal) workers have also seen job losses and reduced work opportunities since 2016.

• In general, women are much worse affected than men. They have higher unemployment rates as well as lower labour force participation rates.

• There is a decline in the size of the labour force as well as the workforce, and a concomitant increase in the rate of unemployment, between 2016 and 2018. This is a matter of concern.

• From the table below, it could be seen that: a. Although the levels of WPR, LFPR and UR differ quite a bit between surveys, the trends are similar; b. The levels match much better across surveys for men than for women; and c. LFPR and WPR are broadly similar across surveys, while there is greater variation in UR reported across surveys.

 
Table

Note: Labour Force Participation Rate (LFPR, percentage of working age people working or looking for work); Workforce Participation Rate (WPR, percentage of working age people working); and Unemployment Rate (UR, percentage of those in the labour force who are looking for work)


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