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Evolving Trends in India’s Job Market
Context:
The latest Periodic Labour Force Survey (PLFS) reveals a significant drop in the unemployment rate, which nearly halved to 3.2% in 2023-24 (July-June) from 6.1% in 2017-18.
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The PLFS also highlights a rise in self-employment, a substantial gender pay gap, and extended working hours for regular wage and salaried workers.
About the Trend:
- Education Paradox: The PLFS report reveals that the unemployment rate for individuals aged 15 and above remained steady at 3.2%, showing a significant decline over the years.
- Even during the pandemic years of 2019-20 and 2020-21, the unemployment rate was relatively low at 4.8% and 4.2%, respectively.
- While unemployment among those with secondary education or higher has decreased from double-digit levels in 2017-18, it remained relatively high at 7.1% in 2023-24.
- The overall unemployment figure is lowered primarily by those with little to no education, as their unemployment rate is less than 1%.
- Experts attribute the high unemployment among the educated to a lack of high-quality job opportunities.
- Question of Quality: The decline in the jobless rate suggests more jobs are available, but their quality may not have improved— in fact, it has worsened since the pandemic, with more people turning to self-employment.
- The share of “own-account workers” slightly increased from 38.6% in 2017-18 to 39.0% in 2023-24, driven by a rise in “helper in household enterprise.“
- Meanwhile, salaried jobs have seen a modest recovery in 2023-24.
- This is concerning because even with strong economic growth of around 8%, the employment structure has not improved.
- Female Force: For years, the low female labour force participation rate has been a concern for policymakers.
- However, the PLFS data shows a significant rise in women’s participation, increasing from 17.5% in 2017-18 to 27.8% in 2022-23 and further to 31.7% in 2023-24.
- Despite this rise, most women are self-employed, with their share in salaried jobs or casual labour shrinking.
- Self-employment remains popular among women due to flexible work hours and the ability to work from home.
- The share of self-employed women surged from 51.9% in 2017-18 to 67.4% in 2023-24, while salaried employment dropped from 21.0% to 15.9% and casual labour from 27% to 16.7%.
- Pay Pain: While self-employment has seen significant growth in recent years, salaried jobs continue to offer the highest earnings.
- In 2023-24, average monthly pay for salaried jobs was about 56% higher than for self-employment and 65% higher than for casual labour.
- However, a substantial gender pay gap persists, with women earning only ₹75-76 for every ₹100 earned by men in salaried positions.
- Cloaking Hours: Recent concerns have emerged regarding long work hours in the formal sector, leading to stress and a poor work-life balance.
- Despite the global standard of a 40-hour workweek for employee well-being, salaried workers in India logged 49.3 hours per week in 2022-23 and 48.8 hours in 2023-24.
- The situation is more pronounced for men, who worked 51-52 hours per week in the past two years, compared to 43 hours for women.