Global Employment Trends 2013

Global Employment Trends 2013 report was recently released by the International Labour Organisation. Here are some relevant snippets from the document:

Growth in India is jobless growth

As noted in the Global Employment Trends 2012 report, robust economic growth in South Asia in the 2000s was largely associated with an improvement in labour productivity rather than job creation, which has been referred to as “jobless growth”, a phenomenon most notable in India. In India’s case, total employment grew by just 2.7 million from 2004–05 to 2009 –10, compared to over 60 million during the previous 5-year period (1999–2000 to 2004–05). However, this does not suggest a static labour market; rather there are many transitions taking place, most importantly a withdrawal from the labour force among young people and women, lowering net employment growth.

Why growth fails to create jobs?

Even where jobs have been created, a large share of workers remained in agriculture, in the urban informal sector or in unprotected jobs in the formal sector. Thus, like many regions, growth has failed to deliver a significant number of better jobs in the formal economy. Most notably in India, the share of formal employment has declined from around 9 per cent in 1999–2000 to 7 per cent in 2009–10, in spite of record growth rates.

Fall in Female Participation

A major reason for the slow growth in employment in countries like India is the fall in female labour force participation: in India the participation rate for women fell from 37.3 per cent in 2004–05 to 29.0 per cent in 2009–10. This can be partly explained by increasing education enrolment in secondary schools across the country: According to Rangarajan et al (2011) only 44 per cent of the decline in the female worker participation ratio in India from 2004–05 to 2009–10 can be accounted for by increased participation of women of workingage (15 and above) in education (Rangarajan et al., 2011).

Young People suffer more

The report also showed that young people have been particularly affected by the slowdown, with an unemployment rate of over 10 per cent, much higher than the average. It is significant that young diploma holders suffer more, implying that India is doing a poor job of reaping its demographic dividend, with most graduating individuals lacking the skills sought by employers. (CGS-15 – Target 2013)