By N Chandra Mohan
Working in India has no doubt been upended by the weakening of overall economic growth since 2017-18, which translates into fewer opportunities for gainful employment for those who leave the countryside to the towns and big cities for employment. These opportunities have dwindled, triggering even reverse migration,also due to shocks like demonetisation in November 2016, introduction of a Goods and Services Tax and lockdowns to battle Covid-19.
According to a report in Bloomberg, due to frustrations over finding jobs, millions of Indians,particularlywomenare exiting the labour force. What prompted an official rebuttal — was the claim that more than half of the 900 million Indians of legal working age don’t want a job.
The labour force participation rate comprises those who work and those without work who actively seek employment as a share of the population above 15 years of age.Those who are neither working nor available for work are classified as not being in the labour force. For example, the labour force participation rate in urban India in July-September 2021 is 46.9% according to the latest official periodic labour force survey. To assume that 53% of Indians of legal working age have exited the labour market as they don’t wantajobisnotrightasthose not in the labour force includes those who attended educational institutions, performed domestic duties, rentiers, pensioners, disabled, sick, children, besides those discouraged from seeking work.
Estimating the real number of discouraged workers, however, is far from easy as official surveys–includingthefive- yearly surveys from 1972-73 which have been discontinued after 2010-11 and the periodic labour force surveys from 2017- 8 do not ask probing questions like whether or not workers are willing to seek work again it if were made available. This problem is acute for women who often are the first to lose jobs and last to regain it. During the pandemic, school closures forced some to drop out. Those unable to study or work were also married off. “Whereas women in other countries often withdraw from the workforce when burdened with a child, women in India drop out when burdened with a husband”, noted The Economist.
The ministry of labour and employment, which is tasked withthePLFS,soughttocounter this narrative arguing that the complete working age population may not be working or seek- ing employment. More than 100 million people were in fact enrolled in secondary, higher secondary, higher or technical education. Majority of these students pursuing higher education are in the working age group but may not be part of the labour force. It added that the PLFS in 2017-18, 2018-19 and 2019-20(July-June)andquar- terly surveys for urban areas till July-September 2021 show a rise in labour force participation rates.That although labour force participation rates may have declined during the first wave of Covid-19, they recovered with the revival of the economy.
However, the picture that actually emerges from the official data — in this article it is restricted to urban India and on a current weekly status basis on which on a person is classified as being or not being in the labour force during the reference period of seven days preceding the survey — is more nuanced and not very different from the media narrative, especially for women workers. The levels of female participation are low as only a fifth of adult women had ajoborsoughtoneinJuly-Sep tember 2021. More importantly,femalelabourforcepar- ticipation rates peaked at 22.1% in 2019-20 and thereafter declined over the subsequent five quarters to 19.9% in July-September 2021, which clearly indicates the labour market distress during the Covid-19 pandemic.
Over this period, unemployment rates for women were also high in double-digits and they dropped to 11.6% in July-Sep- tember 2021 after peaking at 15.8% a year earlier. These rates are declining not because of an uptick in employment as the share of adult working women in the population above 15 years of age has been broadly stable over this period. They reflect the fact that women seeking and available for work are finding it difficult to secure jobs and are dropping out–all of which ties in with declining levels of labour force participation. Thus even the official data point to a dis- couraged worker effect.
Researchers at Azim Premji University found that after losing work, women were 11-times more likely to not return. These dismal labour market trends urgently call for policy intervention to get discouraged women back into the labour market. Above all, it requires recognition of this problem rather than denial. A necessary condition no doubt is faster overall economic growth for attracting more women back into the urban labour force. If the demand for labour is strong and there are shortages, this may facilitate the re-entry of discouraged women.
(The writer is an economics and business commentator based in New Delhi. His views are personal)