Context:
The India Employment Report 2024 is released by the Institute for Human Development and International Labour Organisation which provides critical insights into the state of employment in India.
Key findings:
The report is primarily based on analysis of data from the National Sample Surveys and the Periodic Labour Force Surveys between 2000 and 2022. Other sources of data include the Annual Survey of Industries, the National Account Statistics and the Reserve Bank of India-KLEMS database.
Labor indicators recent Trends:
- Between 2000 and 2018, key labor indicators such as the Labor Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR) showed a persistent deterioration.
- However, post-2019, there has been an improvement in these indicators, coinciding with periods of economic distress, except during peak COVID-19 quarters.
Youth Unemployment:
- India’s youth constitute a significant portion, almost 83%, of the unemployed workforce.
- Notably, the proportion of educated youths among the unemployed has doubled from 35.2% in 2000 to 65.7% in 2022, indicating challenges in matching skills with job opportunities.
Employment Dynamics:
- Despite improvements, the report highlights the persistent challenge of insufficient growth in non-farm sectors.
- Non-farm employment witnessed faster growth compared to farm employment before 2018, primarily absorbed by the construction and services sectors.
- However, around 90% of workers are engaged in informal work, indicating vulnerabilities in terms of job security and social protection.
Skills Gap and Quality Employment:
- India’s large young workforce, considered a demographic dividend, faces a skills gap.
- A significant proportion of youth lack essential skills for employment, as evidenced by data indicating challenges in tasks such as emailing and spreadsheet usage.
- Furthermore, there is a dearth of quality employment opportunities, particularly for educated youth, leading to high levels of joblessness.
Gender Disparities and Social Inequalities
- Gender Disparities: Female labor force participation rate (LFPR) remains among the lowest globally. Although there has been a recent increase in female LFPR, a considerable gender gap persists, with women’s LFPR at 32.8% in 2022, significantly lower than men’s LFPR at 77.2%.
- Moreover, Scheduled Castes and Scheduled Tribes face challenges in accessing better jobs, despite improvements in educational attainment.
State employment index
- 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.
Policy Recommendations:
The report suggests focusing on promoting job creation, improving employment quality, addressing labor market inequalities, strengthening skills and active labor market policies, and bridging knowledge gaps on labor market patterns and youth employment.
Conclusion:
Comprehensive policy measures are essential to address the evolving dynamics of the Indian labor market, ensuring sustainable and inclusive economic growth while mitigating challenges posed by technological advancements and structural transformations.