Jayachandran/Mint
Jayachandran/Mint

Opinion | An Occam’s razor for our shrinking labour force

An NSSO survey shows a sharp drop in the count of Indians at work or looking for a job. Of all explanations on offer, the simplest is the most compelling: recent growth has been jobless

Are far too many Indians jobless? Or are they just opting not to work in large numbers? Fresh data from the Periodic Labour Force Survey for 2017-18 done by India’s National Sample Survey Office (NSSO) draws that question into the spotlight. As reported in The Indian Express, the survey’s results reveal that India’s labour force participation rate (LFPR), which measures the proportion of the population aged 15-64 that is currently employed or seeking employment, fell to 49.8% in 2017-18 from 55.9% in 2011-12, when the NSSO last carried out the same study. This downward trend bears a clear correlation with rising unemployment, as indicated by many other data sets, across the country. But since people who withdraw from the labour force on their own—say, for higher studies—also pull the LFPR down, we need to take a closer look at what is going on. After all, the country’s falling female LFPR has not only been a trend that has persisted for longer, it has also been put to scrutiny by academic researchers. And with overall numbers down, we now know that it is a broader phenomenon than once thought.

Let’s take the female work trend first. Placed at 23.3% last year by the NSSO survey, India’s female LFPR has crashed from a high of 42.7% in 2004-05. For a perspective on how dismal the latest figure is, consider that Nepal boasts a figure of 79.9%, and Bangladesh, 57.4%. Some analysts point to a general increase in women’s education levels. But other causes have also been identified, all of which suggest a “social slideback", as one observer put it. These range from adverse patriarchal norms that keep women away from working outside home to their opting out of the workforce because of the “income effect" of rising household earnings. Lack of jobs is another reason, especially those considered “open" to women, a factor that operates alongside a culture of discrimination faced by women at work across sectors of the economy. According to the Global Wage Report of 2018-19 published by the International Labour Organization, women on hourly wages earn 34% less than men in India. Shockingly, this gender wage gap worsens with higher education levels.

Apart from youngsters preferring to pursue education instead of working, none of the above social factors applies to men. Yet, if the NSSO survey is any indication, India’s male LFPR also looks increasingly grim. As it turns out, the survey also has a figure for the number of males employed in India. It stood at 286 million last year, a decline from 304 million in 2011-12. Further, the shrinkage of the male workforce is more acute in the rural sector, at 6.4%, than in urban India, which recorded a slide of 4.7%. Critics of the survey argue that it has design flaws—that it doesn’t fully capture self employment, for example. Even so, its point-to-point trend can surely be trusted; also, a man resigned to eking out a living as a roadside vendor may justifiably report himself as both jobless and not in search of work. All taken into account, there is no denying that India has an acute job crisis. That being so, what the country needs is a new economic impetus, one that puts more people to work and makes capital sweat for everyone.

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