Employment scenario in India grim, says ILO report

Subject: Economy

Section: Unemployment and inflation

Context:

The India Employment Report 2024 reveals significant shifts in the employment landscape of India, especially among the youth.

About the report:

It is a collaborative effort between the International Labour Organisation (ILO) and the Institute of Human Development (IHD).
Released by Chief Economic Adviser V. Anantha Nageswaran.
The report highlights trends in education levels among the unemployed and broader employment patterns over two decades up to 2022.

Key findings:

The report illustrates a stark increase in the share of unemployed youth with secondary or higher education in India, which nearly doubled from 35.2% in 2000 to 65.7% in 2022.
- Youths represent almost 83% of the country’s unemployed workforce.
Despite an increase in employment and underemployment from 2000 to 2019, the pandemic years saw a decline.
The report points to a long-term deterioration in key labour market indicators (Labour Force Participation Rate, Worker Population Ratio, and Unemployment Rate) up until 2018, followed by an improvement post-2019, coinciding with economic distress periods.
The improvement in labour market indicators during periods of economic slowdown prompts caution, raising questions about the quality and sustainability of jobs created during these times.
The report also touches on the paradoxical nature of India’s employment scenario over the past two decades, highlighting insufficient growth in non-farm sectors and their capacity to absorb agricultural workers.
This situation underscores ongoing challenges in transforming India’s employment landscape despite some positive indicators.

Key definitions:

Labour Force Participation Rate (LFPR):
- LFPR is the number of persons in the labour force as a percentage of the working-age population.
- The LFPR is a measure of the proportion of a country’s working-age population that engages actively in the labour market, either by working or looking for work;
- It provides an indication of the size of the supply of labour available to engage in the production of goods and services, relative to the population at working age.
- The breakdown of the labour force (formerly known as the economically active population) by sex and age group gives a profile of the distribution of the labour force within a country.
  - LFPR (%) = 100 x Labour force / Working-age population
Worker Population Ratio (WPR):
- WPR is defined as the ratio of a country’s working population to its population multiplied by 100.
- Symbolically,
  - Worker population ratio = Total number of Workers / Total Population ×100
- If the ratio is higher, it means that the engagement of people is greater.
- If this ratio is medium or low, it means that a very high proportion of the population of its population is not involved directly in economic activities
Unemployment Rate (UR):
- The unemployed are people of working age who are without work, are available for work, and have taken specific steps to find work.
- The unemployment rate is the percentage of people in the labour force who are unemployed.

Source: TH