Measuring Unemployment

The Periodic Labour Force Survey (PLFS) for 2021-22 revealed an unemployment rate of 4.1% in India, shedding light on the complexities and nuances of measuring and understanding unemployment rates across various nations.

Unemployment Defined

What Does Unemployment Mean?

• Criteria by International Labour Organization (ILO):
  • Currently out of a job.
  • Readily available for work.
  • Actively searching for employment.
• Key Distinction: Not being in an active job search does not equate to being unemployed.

Understanding the Labour Force

• Comprising of: Employed and unemployed individuals.
• Those Not Considered: Students, individuals engaged in unpaid domestic tasks, and similar categories.

Comparative Analysis: Unemployment Statistics

• PLFS 2017:
  • India recorded a historically high unemployment rate of 6.1%.
• PLFS 2021-22:
  • Current rate stands at 4.1%.
• U.S. Rates:
  • As of July 2022: 3.5%.
  • As of July 2023: 3.7%.

Calculation and Influencing Factors

• Determining the Unemployment Rate: It’s essentially the ratio of the unemployed population to the entire labour force.
• Driving Forces:
  • The capacity of an economy to create jobs.
  • Individuals choosing not to seek employment.

Variances in Developed and Developing Economies

Cultural and Social Factors

• India as a Case Study:
  • NSSO Survey 2009-10 highlighted a significant percentage of women preferring domestic roles over employment.
  • Labour Force Participation Rate (LFPR) for rural women was recorded at 26.5%. copyright©iasexpress.net
• Challenges:
  • Informal nature of jobs complicates accurate measurement.
  • Different methods, such as UPSS and CWS, employed by NSSO can yield varying results.

CMIE’s Method

• Bases its metrics on the previous day’s employment status, which can potentially indicate a higher unemployment rate and a decreased LFPR.

Developing vs. Developed Nations

• In developing countries, job regularity is less consistent compared to developed countries.

Impact of Lockdown on Employment

Overview

• March 2020: The lockdown due to the pandemic caused significant disruptions in India’s economy.
• PLFS Data: Covered the period up to June for both 2019-20 and 2020-21, shedding light on the lockdown’s immediate and subsequent impacts.

The Lockdown Scenario

• Individuals with regular employment before the lockdown faced job losses in March 2020.
• Employment statistics showed variations, with a spike during the lockdown and a reduction thereafter, particularly in urban areas as per CWS rates.

The Political Angle

• With elections looming, there’s a heightened focus on understanding and addressing unemployment issues.