The unemployment rate in India has declined post-COVID-19 for all education levels but it remains above 15 percent for graduates and has reached as high as 42 percent for graduates under 25 a report titled State of Working India 2023 released on September 20 showed.
“There is large variation in the rate of unemployment even within the higher educated group. The unemployment rate falls from over 40 percent for educated youth under 25 years of age to less than 5 percent for graduates who are 35 years and above,” the report said. The report was published by the Azim Premji University citing data from the latest Periodic Labour Force Survey (PLFS) 2021-22.
The findings, as per researchers indicate that eventually graduates do find jobs but the key questions about the nature of jobs they find and if these match their skills and aspirations remain, for which more research is needed.
As per the report, since 2019, the workforce has grown in size, participation rates have risen, and unemployment has fallen. “As of 2021-22, the rate of open unemployment had dropped from a high of 8.7 percent in 2017-18 to 6.6 percent. The fall is registered both in rural and urban areas among men and women,” it said.
The report has further noted that the unemployment is matched by stagnant earnings indicating that labour demand continues to be weak and that the effects of continued weak aggregate demand in the economy are being passed on to workers.
After falling for years, women’s workforce participation rate is rising, but not for the right reasons
After falling or being stagnant since 2004, female employment rates have risen since 2019 due to a distress-led increase in self-employment. Before COVID, 50 percent of women were self-employed. After COVID this rose to 60 percent. As a result, earnings from self-employment declined in real terms over this period. Two years after the 2020 lockdown, self-employment earnings were only 85 percent of what they were in the April-June 2019 quarter, the report has read.
It highlights two main challenges with respect to women’s employment - the decline in the rural female workforce participation rate (WPR) and the stagnant, low urban rate.
Faster structural change
After stagnating since the 1980s, the share of workers with regular wage or salaried work started increasing in 2004, going from 18 percent to 25 percent for men and 10 percent to 25 percent for women. Between 2004 and 2017, around 3 million regular wage jobs were created annually. Between 2017 and 2019 this jumped to 5 million per year. Since 2019, pace of regular wage jobs creation decreased due to the growth slowdown and the pandemic.
Upward mobility has increased
In 2004, over 80 percent of sons of casual wage workers were themselves in casual employment. This was the case for both SC/ST workers and other castes. For non-SC/ST castes, this fell from 83 percent to 53 percent by 2018 and incidence of better-quality work such as regular salaried jobs increased. It fell for SC/ST castes as well, but to a lesser extent (86 percent to 76 percent).
Gender-based earnings disparities have reduced
In 2004, salaried women workers earned 70 percent of what men earned. By 2017, the gap had reduced, and women earned 76 percent of what men did. Since then, the gap has remained constant till 2021-22.
Lower caste entrepreneurs are still rare
The report finds that even in the smallest firm sizes, SC and ST workers are under-represented compared to their share in the overall workforce. But even more significantly, SC and ST owners are barely represented among firms employing more than 20 workers. Correspondingly, upper caste overrepresentation increases with firm size.
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