Employment

By
SHYAM S KAGGOD
Points to be covered
• Demographic Dividend

• Employment/Labour Force

• Types of Unemployment

• Measurement

• Employment Elasticity

• Jobless Growth

• Labour Issues in India

• Questions
Demographic Dividend
• 54% of population under the age of 25 years and 65% of the population in India is in the age range of 35 years

• The total population in the working age is going to bulge from 761 mn to 869 mn

• Global economy by 2020 will witness a shortage of young population of around 56 million, India will be the only
country to have surplus young population of 47 million

Country Average Age at 2020

India 29 years
USA 40 years
Europe 46 years
Japan 47 years
 Population

Employed Un-Employed
Who are willing and Are willing but do Non-Workers
get work not get work Are unwilling and unable
Ex-children, senior citizens

Total Labour Force

Types of Unemployment
Who measures unemployment?
Measurement
• Data is collected by NSSO for every 5 yrs based on the activity status

• Activity status

• Usual Principal

• Current Weekly

• Current Daily Status

Measurement
• Labour Force Participation Rate (LFPR)

• Unemployment Ratio

• Worker Population Ratio (WPR)

• Proportion Unemployed (PU) Ratio

Causes of low WPR
• Higher young population (as per census 2011)
Age group Population (%) Sample Reg System (%)
Up to 14 yrs 37.25 28.4
15-60 yrs 55.43 63.3
60+ yrs 07.32 08.3

• The women working population is low

Rural Urban
1999-2000 35% 17%
2011-2012 25% 17%

• The adult women working population is low (in developed countries it is

around 40% whereas in India it is around 20%)
EE for INDIA

Year EE
1972-77 0.57
1999-04 0.50
2004-09 0.01
2009-11 0.18
Is India’s growth “jobless growth?”

8 sectors-Textiles, Leather, Metals, Automobiles, Transport, Handloom, IT/BPO ,

Gems and Jewellery
Is India’s growth “jobless growth?”
Labour Issues
• Skewed distribution
Sector GDP contribution %age employment
Agriculture 15% Approx 49%
Industry 23% Over 13%
Services Around 62% Over 37%

No of employees India (Manufacturing) China (Manufacturing)

Lesser than 49 84% 23%
Small 5.5% 25%
Large (more than 200) 10.5% 52%
Labour Issues
• Quality of employment – Skilled labour is very less
Labour Issues
• Quality of employment – Organized and Unorganized sector
Labour Issues
• Informalisation of Labour
Formal
10 or more hired labourers
Wages are high
Job security is high
Will get social security benefits
Eg-government employees, MNC
workers etc
Informal
Less than 10 hired labourers
Lower wages
Job security is low
No social security benefits
Eg-farmers, construction workers etc

Reasons
• Competition scenario
• Rigid labour laws
• Regular employment has hidden costs (pension, health insurance etc)
• Technology up gradation is faster
Labour Issues

• Lower women participation

• Inspector Raj/Anarchic labour laws

• Casualization of Labour
Reforms undertaken
• Start Up India

• Make in India

• Labour laws rationalization

• MSME Reforms

• Skill India

• Pradhan Mantri Kaushal Vikas Yojana

Way forward
• Data collection and dissemination

• Skilling of labour

• Increase Female LFPR

• Promote further formalization

• Promoting Investments
Questions
Disguised unemployment generally means (2013)

(a) large number of people remain unemployed

(b) alternative employment is not available
(c) marginal productivity of labour is zero
(d) productivity of workers is low
Questions
• Has the Indian growth story been unsuccessful in creating jobs? Discuss

• In the last decade India has had a jobless growth? Evaluate

• How will make in India contribute to the employment sector?

• Discuss Labour issues in India and what measures has the government taken in the
segment

• In case of India the skilled labour availability has been supply driven rather than
demand driven-Discuss

• If the present trend is not reversed India may end up becoming old before it becomes
rich. What is the role of the government in this scenario