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Strategy
GameChanger
Where have all the girls gone? Analysis of newly released data from the 66thround
of the National Sample Survey Organization (NSSO) survey reveals (1) stagnation in
employment creation as women drop out of the workforce, (2) an increasing
dependency ratio, and (3) increased ‘casualization’. On the brighter side,
(1) manufacturing jobs are being generated and (2) wage increases significantly
overshadow consumer price inflation. India needs a better job-creating machine
Unemployment falls; female labor force participation falls even more dramatically
Unemployment rate has fallen dramatically (see Exhibit 1) between the two NSSO surveys (66th
round covering 100,957 households over the period July 2009 to June 2010 and 61st round
covering 79,306 households over July 2004 to June 2005), whether measured on usual status (to
2% from 2.3%) or current daily status (to 6.6% from 8.2%). There has been a dramatic fall in the
labor force participation ratio (LFPR) of women in both rural areas (to 26.5% from 33.3%) and
urban (to 14.6% from 17.8%). Less than one in four women now works, down from three in 10.
Men replace women as few new jobs created; dependency ratio rises
Reading the survey numbers along with the recently released Census findings (for more, please
refer our April 4 note: “Census 2011: More of the same”), the fall in the overall workforce
participation ratio (WPR, driven by the fall in female LFPR) has meant that only 4 mn new
employment opportunities have been created between the two survey periods (while the
population rose by 91 mn). As fewer active workers fend for an increasing population, the
dependency ratio has risen to 1.6 from 1.2 over the two survey periods (see Exhibit 2).
Casualization of labor is increasing, even as manufacturing is creating jobs
A larger proportion of workers across both rural areas (at 38.6% from 34.6%) and urban (at
17.5% from 11.8%) have become ‘casual labor’, even as the proportion of ‘self-employed’ and
‘regular wage/salaried’ falls (see Exhibit 3). Manufacturing created 16 mn employment
opportunities (of which 12 mn for rural males) even as agriculture lost 17 mn workers (as 20 mn
rural women went out). Tertiary sector created 5 mn opportunities, almost all for males.
Wages have risen strongly across India, beating consumer price inflation
The brightest sign for workers across the country is that average wage rates over the country
(across both urban and rural, and men and women) have risen between 11.4-15.1% per annum
over the survey periods, which compares very favorably with the consumer price inflation of 8.5%
per annum between the two survey periods (see Exhibit 4). Urban India has seen better wage hikes
than rural India in the ‘regular wage/salaried’ segment while the ‘casual laborer’ in rural India saw
a marginally better rise than his urban counterpart.
India needs to create better and more employment opportunities
We note that women in rural areas receive `69 for casual labor in works other than public works,
while in public works (whether under MGNREGS or otherwise), they receive close to `87. There is
limited data to say whether rural women are moving to public works: in FY2011, women
comprised 48% of the person-days in MGNREGS). India needs to create a significantly better and
larger number of employment opportunities for both men and women so as to ably harness the
upcoming ‘demographic dividend’.
Understanding the terminology
Labor-force refers to persons who were either ‘employed’ or ‘unemployed’. The labor-force
participation rate (LFPR), as represented in the exhibits below, is defined as the number of
persons in the labor-force per 100 persons. Similarly, the number of persons/person-days
employed per100 persons/person-days is referred to as work-force participation rates (WFPR)
or worker-population ratio (WPR).
Employment and unemployment were measured, with three different approaches, viz., usual
status approach (us), current weekly status approach (cws) and current daily status approach
(cds) by using three different reference periods. For the usual status approach, the reference
period was one year and that for current weekly status approach was one week. The current
daily status was determined based on the activities pursued by persons on each day of the
reference week. In the survey, information on usual principal activity (ps) as well as usual
subsidiary activities (ss) pursued by the sample persons was collected.
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