ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Estimating Absolute Changes in the Workforce

Did Employment Rise or Fall in India between 2011 and 2017?

The Periodic Labour Force Survey 2017­–18 data have created a controversy regarding the quantity of employment generated in the past few years in India. Estimates ranging from an absolute increase of 23 million to an absolute decline of 15.5 million have been published. In this paper, we show that some of the variations in estimates can be attributed to how populations are projected based on data from Census 2011. We estimate the change in employment using the cohort–component method of population projection. We show that for men, the total employment rose, but the increase fell far short of the increase in the working age population. For women, employment fell. The decline was concentrated among women engaged in part-time or occasional work in agriculture and construction.

 

Prior to the slowdown of 2019 and the subsequent shock delivered by the COVID-19 pandemic, the Indian economy had experienced a phase of moderate to high growth (exceeding 5% per annum in real terms) for nearly two decades. However, employment grew much more slowly than the gross domestic product (GDP) (Kannan and Raveendran 2009; Mehrotra 2018; Centre for Sustainable Employment 2018). However, there has been a lack of consensus on the exact nature of this “jobless growth.” Part of the problem, until early 2019, was the paucity of official data on employment. The release of the Periodic Labour Force Survey (PLFS) data in mid-2019 generated a considerable amount of debate regarding its indications about the Indian labour market and the changes that had taken place since the last National Sample Survey Office Employment–Unemployment Survey (NSSO-EUS 2011).1

However, questions such as how much employment increased in absolute terms, or whether the growth in employment matched the increase in the working age population, or even whether it increased or decreased, have proved to be controversial in the recent literature. What is beyond dispute is that between 2011 and 2017, the workforce participation rate, or the worker to population ratio (WPR), fell in rural and urban India, for both men and women engaged in principal and subsidiary work. But when it comes to absolute numbers, different studies have provided us with different answers (Table 1, p 45). Bhandari and Dubey (2019) argued that employment rose by 23 million during this period, while Mehrotra and Parida (2019), Himanshu (2019), and Kannan and Raveendran (2019) all observed that it had declined. However, their estimates of the decline vary between 6.2 million and 15.5 million. As Misra (2019) notes in his column, these contrasts are surprising given that the under­lying data sets used for all of these studies were the same—the 68th NSSO-EUS and 2017–18 PLFS.

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Updated On : 23rd Aug, 2021

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