Chapter 7

Employment: Growth, informalisation

and other issues
Employment ?
Workers
All those who are engaged
in economic activities are
called workers/employed
 Cooking,
fetching water and
fuel wood
and participate in
farm labour are not
workers.
Why?
They are not paid wages or
any form of gain
Only 1/5 of
the urban 70 %
WF is are
women men

400 million strong

work force in
1999-2000 1/3 of
the
rural
work
¾ of 400 million force is
workers are rural women
 Work force?
Labour Force?
Worker Population Ratio?
 Work Force:
those who are actually
engaged in economically
productive activities.
i.e. Employed labour force
 Labour Force:
those who are actually
engaged in economically
productive activities as
well as those who can be
so engaged
Labour force=Workforce + Unemployed
 Worker Population Ratio is
the proportion of
population that is actively
contributing to the
production of goods and
services of a country
Worker Population Ratio = total number of workers X 100
Population
 Worker-Participation Ratio in India
(1999-2000)

Worker ParticipationRate
Sex Total Rural Urban
Men 52.7 53.1 51.8
Women 25.4 29.9 13.9
Total 39.5 41.7 33.7
Measurement of
employment
 Measurement

Usual status Weekly status Daily status

This refers to
number of It refers to
It refers to number number of
persons who
of persons who are persons who are
are willing to
willing to work for willing to work
work for more
a whole week but for a whole day
than 183 days
do not get work but do not get
but do not get
for even 7 days work for even a
work for even
183 days day
 Classification of employment

Self-employed Casual Wage-Labourers Regular Salaried employed

Self employed are those
workers who own and
operate an enterprise to
earn their livelihood
Casual wage labourers hired
workers
 Regular Salaried
Employees are those
employees who engaged
by someone or an
enterprise and paid
his/her wages on a
regular basis
 Distribution of workers (1999-00)

100%
18
90%
37
80%

70%
40
7
60%

50%

40%
5
30% 42 6
20%
Casual wage labourers
10%
Regular salaried employees
0%
Urban Rural Self-employed
 Distribution of worker by gender (1999-00)

100%
90%
80%
70%
60%
Casual
50% wage
labourer
40% s
30%
Regular
20% salaried

10% Self-
employe
0% d
Male Female
 Distribution of workforce by industry
(1999-00 in %)
Industry Rural Urban
Primary
sector
76.7 9.6
Secondary 10.8 31.3
sector

Tertiary 12.5 59.1

sector
 Distribution of workforce by Gender
(1999-00 in %)

Industry Male Female Total

Primary 53.8 75.1 60.4

sector
Secondary 17.6 11.8 15.8
sector

Tertiary 28.6 13.1 23.8

sector
 Highlights

# PS is the main source of employment

# More than ¾ of the WF in rural India

depends on agriculture, mining and
quarrying

# Both men and women workers are

concentrated in PS
 Growth and Changing
structure of employment
Growth of employment and GDP,1951-2000
(Annual average growth rate)
7

5 GDP

w
4
A
n
n
u
a

a
g

a
e

e
v

r
t

t
l

Employment
1

0
1951-56 1956-61 1961-66 1967-69 1969-74 1974-79 1980-85 1985-90 1990-92 1997-00
 Highlights

*GDP grew positively and higher than employment

*Employment grew about 2 %

*Growth of employment declined late 1990s

*Widening the gap between GDP and Employment

*We have been able to produce more G/S without generating

employment ( Scholars refers to this as jobless growth)
 Trends in Employment pattern
(Sector-wise %)

Sectors 1972-73 1982-83 1993-94 1999-00

Primary 74.3 68.6 64 60.4

sector

Secondar 10.9 11.5 16 15.8

y sector

Tertiary 14.8 16.9 20 23.8

sector
 Trend
Distribution of work force shows
substantial shift from farm work to
non-farm work
 Trends in Employment pattern
(Status-wise %)

Sectors 1972-73 1982-83 1993-94 1999-00

Self-
employed 61.4 57.3 54.6 52.6
Regular
salaried 15.4 13.8 13.6 14.6
employees

Casual
wage 23.2 28.9 31.8 32.8
labourers
 Trend
D People have moved from Self-
employed and regular salaried
employees to casual wage
labourers
D This makes the workers highly
vulnerable
CASUALISATION OF
WORK FORCE
Classification of
Workers
 Workers

Formal Informal
(Organised) ( Unorganised)
 all those workers working
under public and private
sector establishments which
employ ten or more workers
are called formal sector
workers
 Informal sector workers all
those workers working under
small enterprises and self
employed.
 It includes
millions of farmers,
agricultural labourers, owner of
small enterprises etc.
 ion
un Soci
Tra
de secu al
rity

Formal sector
workers

Re laws
ur
inc gular L ab o
om
e
 on
ti
e nsa Don’t
p prot
Com ecti
on

Live in Informal sector

slums
workers

Re nts
inc gular U Acc
ou
om te pd
ch at
e n o ed
lo
gy
 As an economy grows
more and more workers
would become formal
sector workers and the
proportion of informal
sector workers would
dwindle
 Formal Infor
sector mal
(28 m) sector
(372m
)
Male Male
(23. (249.
2 m) 8m)

Fem
Fem ale
ale (118.
2m)
(4.8)
400 million workers in India,
28 million workers are formal sector
workers

Calculate:
(a) the percentage of people working
in formal and
informal sectors.
7 % of the people working in organised (formal)
sector
and
93 % of the people working in unorganised
(informal )sectors.
UNEMPLOYMENT
Unemployment is a situation in which
every able-bodied persons are willing
to work but not getting
 NSSO: Unemployment as a situation in
which all those who, owing to lack of work,
are not working but either seek work through
employment exchanges, intermediaries,
friends or relatives or by making application
to prospective employers or express their
willingness or availability for work under the
prevailing condition of work and
remuneration
 Economist
“Unemployed person as on
who is not able to get
employment of even one
hour in half a day”
 Sources of data

to rate
c
Dire ral of
e
Rep Gen yment
lo
o
cen rt of Emp raining
T
sus Report of and ta of
Ind of Da on
ia NSSO t ra ti
Regis ith
w e nt
loy em
Em p
c h a ng
Ex
 Type of unemployment

S
une eason
mp a
loym l Disg
ent Une uise
mp
C yc lical
e nt loym d
m
e m ploy (1/3 ent
un )

Stru o n al
unem ctural ti t
a ry t ploy Fric loymen
u nt p
Vol y m en men
t un e m
e m plo
un
 Unemployment in India
Years Labour Unemployment
force(crores) (Crores)

1972-73 24.02 0.39

1977-78 28.16 1.09
1987-88 33.04 1.24
1993-94 37.97 0.95
1999-00 40.67 0.80
Employment generation
Programmes
 Conclusion
* Structure of work force
changed
* Out sourcing service increased
* Govt. Provide more policy and
programmes to generate
employment opportunities
Thank you