State of employment in India: What a new report says about youths and women, concerns and caution

March 28, 2024
Posted by: OptimizeIAS Team
Category: DPN Topics

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State of employment in India: What a new report says about youths and women, concerns and caution

Subject: Economy

Section: Inflation and unemployment

Context:

India Employment Report 2024 is recently released by the International Labour Organisation (ILO).

The index is based on seven labour market outcome indicators:

percentage of workers employed in regular formal work;
percentage of casual labourers;
percentage of self-employed workers below the poverty line;
work participation rate;
average monthly earnings of casual labourers;
unemployment rate of secondary and above-educated youth;
youth not in employment and education or training.

The report has flagged concerns about poor employment conditions:

The slow transition to non-farm employment has reversed;
Women largely account for the increase in self-employment and unpaid family work;
Youth employment is of poorer quality than employment for adults;
Wages and earnings are stagnant or declining.

Report findings:

The ‘employment condition index’ has improved between 2004-05 and 2021-22. But some states — Bihar, Odisha, Jharkhand, and UP — have remained at the bottom throughout this period, while some others — Delhi, Himachal Pradesh, Telangana, Uttarakhand, and Gujarat — have stayed at the top.

Segment	Findings	Increased/Decreased
Informal employment	Almost 82% of the workforce is engaged in the informal sector, and nearly 90% is informally employed.	Increased
Self-employment	Remains the primary source of employment — 55.8% in 2022. Self-employment and unpaid family work has increased, especially for women.	Remained almost stable around 52% between 2000 and 2019. This reversed by 2022, with self-employment increasing to 55.8%,
Casual employment	Acounted for 22.7%	Consistently declined to 22.7% in 2022 from 33.3% in 2000.
Regular employment	Accounted for 21.5%	Increased by almost 10 percentage points, to 23.8% from 14.2% between 2000 to 2019, and then decreased to 21.5% by 2022.
Participation of women	The female labour force participation rate (LFPR) in India remains among the world’s lowest. There is a considerable gender gap — women’s LFPR (32.8%) in 2022 was 2.3 times lower than men’s (77.2%). India’s low LFPR is largely attributed to the low female LFPR, which was much lower than the world average of 47.3% in 2022, but higher than the South Asian average of 24.8%.	Declined by 14.4 percentage points (compared to 8.1 percentage points for males) between 2000 and 2019.
Structural transformation	The share of agriculture in total employment fell to around 42% in 2019 from 60% in 2000, which is absorbed by construction and services (share in total employment increased to 32% in 2019 from 23% in 2000.) The share of manufacturing in employment has remained almost stagnant at 12-14%.
Youth employment and Underemployment	Both increased between 2000 and 2019 but declined during the pandemic years. In 2022, the share of unemployed youths in the total unemployed population was 82.9%. The share of educated youths among all unemployed people also increased to 65.7% in 2022 from 54.2% in 2000. The unemployment rate among youths was six times greater for those who had completed secondary education or higher (18.4%) and nine times higher for graduates (29.1%) than for persons who could not read or write (3.4%) in 2022. This was higher among educated young women (21.4%) than men (17.5%), especially among female graduates (34.5%), compared to men (26.4%). The unemployment rate among educated youths grew to 30.8% in 2019 from 23.9% in 2000, but fell to 18.4% in 2022.
Social Inequalities	Schedule castes (SCs) and Schedule tribes (STs) lag in terms of access to better jobs. SCs and STs have greater participation in workforce due to economic necessity but engaged more in low-paid temporary casual work and informal employment. Despite improvement in educational attainment among all groups, the hierarchy within social groups persists.

Major recommendation:

There are five key policy areas for further action: promoting job creation; improving employment quality; addressing labour market inequalities; strengthening skills and active labour market policies; and bridging the knowledge deficits on labour market patterns and youth employment.