State of Working India'23: relationship b/w economic growth and social disparities in India

42% of graduates under the age of 25 are unemployed. This is the data point which is floating around on the internet. The data comes from Azim Premji University’s State of Working India Report 2023. But, there is more unpack in the report. Here, let me help you out.

Structural transformation in the nature of employment

As per the report, the period between 1983 and 2019 (pre-pandemic) saw a rapid increase in the share of non-agricultural employment as growth pulled people out of agriculture. But, the share of regular salaried wage employment or employment in the organised sector was not similar. Since 2019, the pace of regular wage job creation has further decreased due to the growth slowdown and the pandemic. 

While for men, exit from agriculture meant a large increase in the share of construction, for women it meant an exit from the workforce. But for those women who remained in employment, the share in regular wage work increased.

Intergenerational mobility increased, yet remains lower for marginalized castes

The report analysed father-son pairs in the NSSO employment surveys and shows that over the last 15 years, upward mobility has increased in terms of the type of work performed. In 2004 over 80% 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, by 2018, this proportion had fallen to 53% with the rest engaged in regular wage work (mostly of the informal kind). It fell for SC/ST castes as well, but to a lesser extent (75.6%). 

Caste-based representation in work has reduced

The report provides the case of waste-related work where Scheduled Caste workers were more than 5 times over-represented in the early 1980s and over 4 times in leather-related work. This has declined rapidly over time, though it is not completely eliminated as of 2021-22. In waste management and sewerage, the over-representation of SCs decreased to 1.6 times in 2011 before increasing slightly again.

Gender-based earnings disparities have lessened but remain high

In 2004, salaried women workers earned 70% of what men earned. By 2017 the gap had reduced and women earned 76% of what men did. Since then the gap has remained constant till 2021-22. The disparity in earnings is widest in self-employment and for SC/ST women workers.

The connection between growth and good jobs remains weak

Since the 1990s year-on-year non-farm GDP growth and non-farm employment growth are uncorrelated with each other suggesting that policies promoting faster growth need not promote faster job creation. However, between 2004 and 2019, on average growth translated to decent employment. This was interrupted by the pandemic which caused larger growth in distressed employment. 

Unemployment rates for undergraduates under 25 are alarming

Findings from the report suggest that post-Covid the unemployment rate is lower than it was pre-Covid, for all education levels. But it remains above 15% for graduates. The data for graduates under 25 years is even more startling with the figures for unemployment reaching as high as 42%.

Women’s Worker Population Ratio (WPR) is rising, but their earnings have declined in real terms

The report says that a distress-led increase in self-employment led to an increase in female employment rates since 2019. Before Covid, 50% of women were self-employed. After Covid, this rose to 60%. However, earnings from self-employment declined in real terms over this period. Even two years after the 2020 lockdown, self-employment earnings were only 85% of what they were in the April-June 2019 quarter.

Gender norms continue to be significant for women’s employment

As the husband’s income rises, women are less likely to work. In urban areas, after the husband’s income crosses ₹40,000 per month, the chance of the wife working increases again (i.e. there is a U-shaped relationship). There is also a strong intergenerational effect of gender norms. Compared to households where there is no mother-in-law present, married women living in households where the mother-in-law is present but not employed are 20% (rural) to 30% (urban) less likely to be employed. However, if the mother-in-law is employed herself, daughters-in-law are 50% (rural) to 70% (urban) more likely to be employed. 

Under-representation of lower caste in large firms

The report finds that SC and ST owners are under-represented compared to their share in the overall workforce. This is true irrespective of the firm size. 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.

Conclusion

The Azim Premji University’s Centre for Sustainable Employment on Wednesday released the ‘State of Working India 2023’ (SWI) report, which analyses the impact that growth and structural change have had on long-running social disparities in India. It takes a detailed view of the relationships between economic growth, structural change, and labour market outcomes for the key social identities of caste, gender and religion. In doing so, it makes use of official datasets such as the National Statistical Office’s (NSO) Employment-Unemployment Surveys, the Periodic Labour Force Surveys, the National Family Health Surveys, the Annual Survey of Industries, and the Economic and Population Censuses. 

The report concludes by saying that the next few decades in India’s journey are crucial ones if India is to realise the potential of its demographic dividend. It shows that significant progress has been made on all fronts since the 1980s, but also raises concerns over persistent, and in some cases, growing disparities. It notes that the growth must be achieved while making progress on the elimination of these social disparities.

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