CASE STUDY: INDIA’S LABOUR MARKET
The labour market trend which is a cause for concern
The number of unemployed people remains relatively high, both in urban as well as rural areas, with urban areas showing greater unemployment in numbers, possibly due to inadequate employment planning in urban areas. Also, low Labour Force Participation Rate (LFPR) in both rural and urban economies for the age group 18-29 is also a trend that causes concern.
These are areas are critical since they indicate (a) degree of growth in number of jobs in both rural and urban areas, and, (b) employability of youth in the prime working age group
A critical perspective on the trend
The number of unemployed people in India remains relatively high, with an average unemployment rate of 4.7% by UPS approach. The UPS measure includes, in the definition of employment and workforce, both principal and subsidiary status activities. This measure, therefore, includes not just ...view middle of the document...
Among rural males, a similar pattern is observed, except in the 25-29 age group, which may be attributed to the patriarchal system, hence, the male worker population ratio is unlikely to perceive any major decline in the prime age group of 25-29. Even when productive employment opportunities are not available, males cannot afford to withdraw from the labour market. Instead, they get residually absorbed in a wide range of low productivity activities. On the other hand, the non-availability of productive employment opportunities over the long term may motivate women respondents to indicate that they are not in the labour market (discouragement)
In the rural context, however, it is quite unbelievable that tertiary-level education was pursued so widely that it led to a major decline in the worker population ratio of older youth. Given conservative social practices, this explanation of participation in higher levels of education, particularly in the case of rural females, does not seem tenable, and could indeed be a case of discouragement.
In urban areas, the worker population ratio also low both among the males and the females in the age groups of 15-19 and 20-24. While the trend continues in the next age bracket (25-29) for females, a marginal increase is noted among urban males. It is rather difficult to use the explanation relating to education to justify this drop among females in this age bracket. On the contrary, the employment scenario is possibly becoming less favourable towards women workers, possibly due to higher emphasis on skill-intensive employment generation.
How the trend could be revised
In order to tackle the challenges of participation and job quality for the youth of India, policy interventions should promote a better quality education, on-the-job training, and skill formation on the one hand and, productive job creation on the other. For the self-employed, credit assistance and marketing assistance could be a huge support. The Planning Commission of India stresses the need to increase the regular employment share and reduce the casual employment share of total employment. Nearly 60% of the employed population works in the agricultural space, and these individuals are grossly underutilized (termed as underemployment). The government should aim at creating employment opportunities to gainfully employ such individuals.