How to read India’s latest employment data
Context- Last week, the Ministry of Statistics and Programme Implementation released the results of the Periodic Labour Force Survey for the period July 2022 to June 2023. This is the sixth PLFS report and each tracks a 12 month period between July and June.
Significance of PLFS reports
- The PLFS provides data on different metrics so that the policymakers can understand the proportion of people demanding work, the proportion of people among them who failed to get a job, the gender differences in employment as well as wages etc.
- The PLFS also tells the sectoral distribution of workers in the economy — what percentage is involved in agriculture, for instance. It also records the type of work people do — for instance, how many are engaged in casual labour, how many work for themselves, and how many have regular salaried jobs etc.
- It is also noteworthy that PLFS collects data in two ways — Usual Status (US) and Current Weekly Status (CWS).
- Broadly speaking, within usual status, the survey respondent has to recall their employment details from the last one year while in the CWS, the respondent has to recall the details over the past one week.
- Increasingly, the global practice has been to focus more on CWS because the recall is better over the past week.
Most of the findings below are all based on CWS.
1) Unemployment Rate (UER)
- The UER is often the most talked about metric in popular discourse. Simply put, it refers to the proportion of people who demanded work over the past year and failed to get it.
- For the population above 15 years of age, the UER has fallen significantly — from 6.6% to 5.1% over the last year (that is, July to June cycle). Simply put, 5.1% of all the people above 15 years of age who demanded work failed to get one.
2) Labour Force Participation Rate (LFPR)
- The LFPR is a measure of the total population demanding work, and it is presented as a proportion of the total population that is above 15 years of age.
- India’s LFPR, which had been inching up, shot up significantly in the past year. As of 2022-23, 54.6% of all Indians above the age of 15 were looking for a job.
3) LFPR for women
- The data shows that female LFPR has gone up over the years but there were two discrete step-ups — one in 2019-20 (when India’s GDP growth rate had slowed down to less than 4% and this was before the Covid pandemic hit) and second in 2022-23 when it rose to 31.6%.
4) Worker Population Rate
- Since the proportion of people demanding work (the LFPR) goes up and down and the percentage of those failing to get a job (the UER) is expressed as proportion of the former, it can throw off analysis.
- As such, there is another way to look at the labour market: Worker Population Ratio (WPR). The WPR is the percentage of persons employed among the persons in the population.
- This metric too has been going up and especially noteworthy are the two discrete step-ups in 2019-20 and 2022-23.
5) WPR among women
- It metric throws light at the WPR for women to understand what’s leading to the spike in overall WPR.
- Again, the WPR for women has been going up but two main spikes have been in 2019-20 and 2022-23.
6) Monthly earnings
The PLFS reports also provide a sense of how much do people earn in different types of jobs.
- While it is true that incomes have broadly gone up — after falling during Covid — the main takeaway from this data emerges when one compares how little have monthly incomes changed over the past 6 years, especially in the face of a sharp rise in inflation.
7) Distribution of workers
- The data shows that self-employment has risen and jobs in the other two categories have fallen in proportion.
- It is also noteworthy that self-employment among women is the key driver for this overall trend.
At first glance, PLFS 2022-23 throws up some positive trends: Unemployment rate continues to fall, LFPR and WPR see significant spikes. In particular, it is heartening to note that more and more women are joining the workforce. This would suggest that as the Indian economy recovers, more and more well-paying jobs are getting created.
However, most of the jobs that are getting created are of the “self-employment” type.
Syllabus- GS-3; Economy
Source- Indian Express