03A. Unemployment

Dependency ratio

Non-working age <15 and >60/ Working age (15-59)

1. Unemployment

2. Who measures Unemployment

3. How do they measure

1. People who are capable of working (working age population) and actively seeking work and unable to find work

2. NSSO of NSO of MoSPI

3. Sample surveys, majorly Periodic labour force survey

1. What is labour force

2. labour force participation rate

3. Worker - population ratio

4. Unemployment rate

1. Those who are actively looking for work and also working

2. Labour force / total population

3. workers / total population

4. No of unemployed persons/ labour force

Demographic dividend vs demographic disaster

1. Growth

2. No opportunities and no skilling with high working age population

Unemployment

1. Survey

2. frequency of survey in urban

3. methods

1. PLFS

2. Urban - 3 months and rural is 1 year

3. Usual Status, current weekly status and current daily status

Usual Status

1. In labour force criteria

2. Employed (Principle status)

3. Employed (Subsidiary status)

4. usual status =

1. looking for work for majority time that is > 182 days

2. in labour force and found work for majority of days

3. In labour force but not found majority days work but found atleast 30 days work

4. Principle status + Subsidiary status

Current weekly status

1. what

2. frequency

1. If person is able to find work for atleast 1 hour is everyday of week then employed

2. Urban - 3 months, rural -6 months

Current Daily status

1. Person is in labour force for 1 day

- engaged in work > 4 hours -> 100% engaged

- engaged in work 1-4 hours -> 50% engaged

- engaged in work < 1 hour -> unemployment

Reasons for unemployment

1. at economy level

2. reasons specific to an economy and time

3. Reason specific to a person

1. -Classical UE

- Keynesian UE

2. -Structural

- Seasonal

- Frictional

- cyclic

3.-Underemployment

- disguised employment

- voluntary unemployment

1. Classical Unemployment

2. Keynesian UE

3. Structural UE

4. Cyclical UE

5. Seasonal UE

6. Frictional UE

7. Underemployment

8. Technological UE

9. Disguised Unemployment

1. Due to minimum wages and labour unions

2. due to low aggregate demand in a business. Ex: Great depression

3. Due to how the economy of nation is structured, for example India is agri based, low median age, less skill, so when something in structure changes that is shifting to industry from agri or skilling etc leads to change in UE

4. Economy goes in cyclical periods of growth(boom) and recession

5. Seasonal nature of work

6. Due to inefficiency in the market, people find it difficult to find desired jobs even though they are available somewhere in the market (people in between jobs)

7. Even though they are working they are just not utilising their full capacity, skills

8. UE due to technology advancement

9. marginal output of workers = 0

Natural rate of unemployment (NAIRU)

Structural + Seasonal + Frictional + Voluntary

What does

1. Employment < Natural rate signify

2. ..... > .... signify

3. ... = ... signify

1. Recessionary gap

2. Inflationary GDP

3. Potential GDP

Shapes of economic recovery

1. V shape

2. Z shape

3. K shape

4. W shape

5. L shape

1. absolute output falls and then reaches back to expected path with help of high growth

2. The absolute output bounces back more than original path for some time and then it falls back to expected regular trend

3. One set of business activities thrive while others fall

4. The economy falls again after it becomes a little better

5. The economy falls and stays there for long time

1. Employment elasticity

2. What does high employment elasticity signify

3. What does low employment elasticity signify

1. % change in employment / % change in GDP growth

2. Labour intensive growth

3. Jobless growth

Some facts

1. UE rate in India

3-4%

Lets see skilling in India now

Current Skilling architecture

1. PMO -> MoHRD(now renamed as Ministry of education), MoRuralDevelopment, MoSDE

2. MoHRD -> NCERT, AICTE, Dept of school education, Dept of Higher education for skill development of children

MoRD -> ex: DDU-Grameen Kaushal Yojana (GKY) for skill development of rural youth

MoSDE -> Director general of Training(DGT) - apex org for vocational training &

National council for Vocational Education and training (NCVET) - regulatory body, it sets standards for vocational institutions

National skill developmnt corporation(NSDC) - It works withprivate sector for skill devpt.

MoLE vs MoSDE

MoLE focuses on currently active workforce while MoSDE focuses on preparing future workforce

Flagship schemes for Skill development

1. National skill development mission

2. PM Kaushal Vikas Yojana

3. National Skill Quantification framework

4. National career Service

- under which ministry

- what is it

1.

2. - Implemented by NSDC,

-industry relevant skills are taught with help of industries

- recognition of prior learning

3. It divides the skills of people into category based on how more they have knowledge about it

- total 8 levels

4. Under Molabour and employment

- provides employment related services online

Formal vs Informal Employment

It is the relation between the employer and employee

formal: relationship follows labour laws well

well defined

- roles

- responsibilities

- comepnsation

- salary hikes

- EPF, TDS etc

informal - even though labour laws are written for informal sector too, they are rarely followed

Organised vs un-organised

Organised - atleast 20 members with power or 40 members without power and registered under Factories act, companies act etc (according to new labour laws, old were 10,20)

Pension schemes

1. Old Pension schemes

2. Employees' pension Scheme(EPS), 1995

3. National Pension Scheme, 2004

4. Atal Pension Yojana, 2015

5. Unified Pension Scheme, 2024

1. It was there from start and here there is no contribution from the workers, government paid everything fro their pocket as pension

2. Until now only gvt employees used to get pension, while the pvt employees get only lump sum amount from provident fund so to tackle this EPS is introduced in 1995,so regular gvt job people cannot opt for this but PSUs can opt in because even they did not have pension before it. Even here lump sum withdawl is possible but yo should satisfy some criteria. Not market linked

3. so gvt realised that they are getting huge dent in their finances so they started to take some money as contributions from the employees and they also started contributing to it. This was market linked scheme and was only for gvt people later in 2009 even pvt employees were also allowed, a private person can invest in NPS all by himself even if his employer doesnt want to contribute. One feature of this is that you can take lump sum amount at retirement (complete or only part depending up on the total amount we have)

4. NPS is very complex for low-income worker so for them a guaranteed pensions scheme was introduced

5. NPS is market dependent so it was receiving backlash hence gvt inreoduced UPS, here they guarantee minimum 50% of pay of last salary even if the market does bad.

Why provident fund when there is pension scheme

1. Who contributes

Pension is a steady stream but it cannot fund one time massive expense, so it is designed for events like marriage of child, education

2. Even here both employer and employee contributes

diff types of worker hirings

1. Salaried

2. Professional/Contractual

3. Informal

4. recent Code on Social Security

5. Fixed term employment

6. Gig workers and platform workers

- classification

1. formal recognition

2. not employee, rights as per contract, Indian Contracts Act works not labour laws so even minimum wage is not needed, this was actually created for professional skilled workers who have good bargaining power, it is designed so that a simple project doesnt need to follow all the labour laws but people can use it to exploit low-skilled workers like cab drivers etc

3. no recognition, but minimum wages apply here too

4. to stop exploitation of contractual workers without reducing ease of doing business, the code introduced gig/platform workers which made companies to pay 1-2% of their turnover for insurance benefits and old-age protection

5. generally employees cannot be removed without valid reason and to remove large number of employees permission of labour bureasu should be taken. so to tackle this headache fixed term employment is introdcued - formal employment for a fixed amount of time

6. Platform workers - uber driver, swiggy delivery, tutor who finds clients using upwork etc

non-platform workers - part-time tutors , freelancers

Main worker vs Marginal worker

1. WHo works for atleast 183 days in a year

2. Who works for less than 183 days a year