What PLFS tells us about India labour market

News– Periodic Labour force survey (PLFS) data shows that the unemployment rate is close to pre-covid levels that as was in the year 2020. 

What is PLFS  

It was launched by National statistical office (NSO). 

It has two objectives -a) To estimate the key employment and unemployment indicators (viz. Worker Population Ratio (WPR), Labour Force Participation Rate (LFPR), Unemployment Rate) quarterly for the urban areas only in the ‘Current Weekly Status’ (CWS). b) To estimate employment and unemployment indicators in both ‘Usual Status’and CWS in both rural and urban areas annually. 

What current data shows  

Although the unemployment rate is same for men for both quarters (pre covid and 2021 first quarter) but it has increased for women compared to last quarter. 

Higher unemployment rate in the recent report again shows that women bore the brunt of economic and social fallout caused by the pandemic. 

Low LFPR for Women can have four key explanations 

1) Rising educational enrolment of young women-India has made considerable progress in increasing access to education for girls. 

2) lack of employment opportunities– the nature of economic growth in the country has meant that jobs were not created in large numbers in sectors that could readily absorb women, especially for those in rural areas. 

3) Effect of household income on participation-Despite inadequate job creation, household incomes did rise, which potentially reduced women’s participation, especially in subsidiary activities (“income effect”) due to change in preferences. 

4) Measurement– Finally, though most women in India work and contribute to the economy in one form or another, much of their work is not documented or accounted for in official statistics, and thus women’s work tends to be under-reported. 

What is the Way forward 

This Problem requires a comprehensive approach to improving labour market outcomes for women through improving access to education and training programs, maternity protection, along with the promotion of a pattern of growth that creates job opportunities. 

1. How are LFPR and WPR defined (Focus should be on constituents of formula and not the whole formula as such)

-LFPR (%) = (Persons employed + persons unemployed x 100) / (Working-age population) 

-Worker Population Ratio-(WPR) = No. of employed persons x 1000 /Total population. 

Source– This post is based on the article “What PLFS tells us about India labour market” published in Livemint on 8th Dec 2021.