Further notes on employment and education

These notes are from 'Employment, Education and the State', NIPFP Working Paper No. 188 dated 15th February 2017 by Sudipto Mundle.

The paper claims that the myth of jobless growth in India is demolished based on the Indian Employment Report 2016 by Ajit Ghosh.

However, this impression of static employment is quite misleading as Ghosh has pointed out in IER 2016. In the absence of social security, poor households cannot afford to remain completely unemployed. If proper jobs are not available, they will take on any work that is available, casual, informal, part-time — anything to survive. Thus, an aggregate figure of employment is typically much larger than the actual level of regular, productive employment, and does not give us an adequate picture the actual condition of the labour market. Ghosh explains that when conditions improve and household income rises, those at the bottom layer may simply withdraw from the labour market.

In simpler terms, poor people have to work to survive so when times are bad, they definitely work and when times are good, they stop working. Thus, employment numbers not moving is perfectly fine. Hmm.

While there has been some reduction in LFPR [Labour Force Participation Rate] among children and the elderly, by far the most important explanation is the decline in the LFPR for the working age group 15-60, especially among women. The IER argues that this decline is mainly on account of declining poverty. It points out that women’s LFPR declined the most among the poorest households, whereas, it actually increased in the case of better-off households. Similarly, by levels of education, women’s LFPR declined among those not literate or the least educated, but increased among those with higher levels of education. The interpretation is that women who were earlier forced to take on the worst paid, lowest quality jobs because of their poverty have withdrawn from those jobs as their household incomes have risen on account of better paid jobs for their husbands.

If the poorest, most uneducated women were forced to do the worst job before but now they don't have to do them because of prosperity, who's doing them?