Urban unemployment drops to 5-year-low in 2022-23, says NSO survey
Urban unemployment rate stood at 6.1 per cent, lowest in last five years, in the quarter ending March in FY23, according to the quarterly bulletin released by NSO
PremiumIndia's urban unemployment rate slid to its lowest level to 6.8 per cent in the March quarter of FY23, showed the PLFS data for the previous quarter released on May 29, reported HT. The rate was remarkably low for the first time since the National Statistical Office began publishing quarterly bulletins on urban jobs in 2018. The NSO publishes quarterly bulletins for urban areas using the Periodic Labour Force Survey (PLFS).
It is worth noting that not just the March quarter, but the whole year FY 2022-23, showed promising data for urban jobs. Urban unemployment was the lowest in 2022-23 (since 2018-19) for all quarters.
Why there was low urban unemployment?
The low urban unemployment was low not because fewer people were seeking jobs. It was mainly because the share of people working or looking for jobs – called the Labour Force Participation Rate (LFPR) – was the highest in 2022-23 (since 2018-19) for all quarters, reported HT. There was a reduction in unemployment in the last quarter because a record proportion of job seekers in urban areas sought and found jobs in 2022-23. In the quarter ending March, LFPR stood at 38.1%, which was the highest in the urban bulletin series.
One of the reasons behind the low unemployment rate was a sharp rise in a number of unpaid family workers in five years throughout the year. The number was 6.1 per cent in the March quarter.
“Unemployment rate is driven largely by educated young people. If that is low, that is a good sign, unless WPR (Worker Population Ratio) has fallen," Amit Basole, who teaches economics at Azim Premji University, told HT. One of the main reasons behind the increasing WPR is due to unpaid work. It happens mainly when women take up such work.
Quarterly bulletins give headline numbers for urban areas in the entire PLFS series. It is important to compare the data of the same quarter across years, mainly because some jobs, like agriculture, are seasonal.
It is worth noting, that there has been a fall in the unemployment rate since the pandemic, but the share of unpaid family workers did not see an increase. The recent data shows that the situation has worsened in urban areas in the fiscal year 2022-23.
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