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

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Labour Force and Employment Growth in India

Evidence from the EUS (2011–12) and PLFS (I and II)

Labour Force and Employment Growth in India

This study analyses the changing structure of the labour force and employment in India using the Employment and Unemployment Survey (2011–12) and the Periodic Labour Force Surveys I and II (2017–18 and 2018–19). The estimates indicate that there was a mere improvement in employment from 2017–18 to 2018–19; however, as this was accompanied by a decline in the size of the workforce between 2011–12 and 2017–18, this does not indicate recovery. The unemployment rate, especially that of youth, remains at a historic high. A remarkable decline in the share of agriculture in the workforce without a corresponding increase in the non-agricultural sector indicates a somewhat distorted structural transformation. A sizeable portion of the female population has been withdrawn from the labour and workforces. 

Employment is one of the key building blocks of Indian development policy (Papola and Sahu 2012). Driving growth in the labour and workforce is a critical challenge for Indian policymakers and is a hotly contested issue in political and academic debates. Creating decent job opportunities outside of the agricultural sector has been one of the biggest challenges to confront policymakers in recent decades in their attempts to achieve faster and more inclusive growth. In this regard, India’s low employment growth, termed “jobless growth,” in a phase of high-income growth, has sparked intense debates in the Indian labour market since the turn of the 20th century (Mehrotra et al 2012; Kannan and Raveendran 2009; Srivastava 2016).

The growth of the labour and workforces depends on population growth and labour force participation rates along with the rate of growth of the economy and generation of employment opportunities (Motkuri et al 2019). The demographic transition in India has resulted in decelerated population growth; hence, the population’s contribution to growth in the labour and workforces is receding. Both the labour and workforce participation rates in the fast-growing Indian economy should have been higher post-2000 owing to this demographic transition and the resultant bulge in the working age population; however, in reality, participation rates, especially those of women, have declined since the late 1990s. Further, the substantial increase in the unemployment rate is alarming. Labour scholarship notes that the post-reform, high-growth trajectory of the Indian economy has resulted in jobless growth—contrary to what was expected—and studies have observed further job losses (Abraham 2017). The shutdown owing to the COVID-19 pandemic aggravated job losses and the plight of migrant workers.

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Updated On : 20th Nov, 2021

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