Unemployment measurement in India
The National Sample Survey Organization (NSSO),since its inception in 1950, does the measurement of employment / unemployment in India.
The National Sample Survey Organization (NSSO) provides three different estimates of employment and unemployment based on different approaches / reference periods used to classify an individual’s activity status. These are the
In order to find out whether an individual is employed or unemployed it needs to be first determined whether h/she belongs to the ‘Labour Force’ or not, which in turn depends on the Activity Status of the individual during the chosen reference period.
Activity Status refers to the activity situation in which the individual is found during the reference period with respect to his participation in economic or non-economic activities.
The NSSO defines following three broad Activity Status i) Working (engaged in an economic activity) i.e. ‘Employed’ ii) Seeking or available for work i.e. ‘Unemployed’ iii) Neither seeking nor available for work.
All those individuals having a broad activity status as i) or ii) above are classified as being in the Labour Force and those having activity status iii) are classified as outside the Labour Force. Thus labour force constitutes of both employed and unemployed.
In other words, Labor force (also called work force) is the total number of people employed or seeking employment in a country or region.One is classified as ‘not in labour force’, if he or she was engaged in relatively longer period in any one of the non-gainful activities.
Unemployment rate is the percent of the labor force that is without work.
Unemployment rate = (Unemployed Workers / Total labor force) X 100
As far as the situation in India was concerned, the longer the reference period, the smaller will be the rate of unemployment and the shorter the reference period, the larger the unemployment rate.
The Work participation rate is also estimated which is defined as the percentage of total workers (main and marginal) to total population.
Work participation rate = (Total Workers (Main+Marginal) / Total Population) X 100
The NSSO collected employment data based on ‘usual status (UPS)’ only upto its eighth round. However from 9th round onwards, it started collecting data based on ‘current weekly status (CWS)’ approach also. Planning Commission set up the Committee of Experts on Employment Estimates (Dantwala Committee) in 1960. The Committee recommended concepts and definitions for conducting such surveys. It recommended collection of data based on CDS in addition to UPS and CWS. Accordingly, beginning with the 27th round (1972-73),quinquennial(5-yearly) surveys were being conducted by NSSO to collect employment-unemployment data based on all the three approaches of UPS,CWS and CDS.
In the annual survey rounds of NSSO, only employment-unemployment data based on ‘usual activity status’ and ‘current weekly status’ were collected up to 59th round. However in 60th round, a separate schedule was canvassed to collect employment and unemployment data on ‘current daily status’ also. In fact, since 60th round, NSSO is collecting data on employment and unemployment on current daily status also in its annual rounds.
For NSSO reports please see the website of Ministry of Statistics and Programme Implementation
NSSO surveys are conducted on quinquennial basis. In order to measure employment-unemployment on an annual basis, Employment-Unemployment Survey is being conducted by Labour Bureau since 2009. This survey also captures the labour estimates in terms of usual principal status, usual principal and subsidiary status, current weekly status and current daily status. The findings of the survey may be viewed at http://labourbureau.nic.in/rep_1.pdf
Besides this, a quick quarterly enterprise level surveys(Quick Employment Survey)are also conducted by Labour Bureau to capture the changes in the employment –unemployment scenario at much shorter interval. However the intent of this survey was to mainly assess the impact of global financial crisis on the Indian economy.
The reports of these quarterly surveys may be accessed at http://labourbureau.nic.in/reports.htm
Pay roll Data
In 2018, India, for the first time, introduced monthly payroll reporting for the formal sector to facilitate analysis of new and continuing employment. The payroll data, categorized age-wise, for the months September, 2017 to February, 2018 has been released on 25th April, 2018.This is based on the data from Employees’ Provident Fund Organisation (EPFO), Employees’ State Insurance Corporation (ESIC) and the Pension fund Regulatory and Development Authority (PFRDA). The payroll data from these three organisations would now be released every month.
- Planning Commission (2001), Report of the task force on employment opportunities http://planningcommission.nic.in/aboutus/taskforce/tk_empopp.pdf
- NSSO (2005), Employment unemployment situation in India (Part 1), 61st round (2004-2005).
- Mohanan P.C., Background paper for the workshop on conceptual issues in measurement of employment and unemployment, NSC Secretariat. http://mospi.nic.in/Mospi_New/upload/nsc_background_paper_12jan09.pdf
- J. Krishnamurthy, G.Raveendran (2008), Measures of labour force participation and utilization, working paper No. 1, National Commission for Enterprises in the Unorganized Sector. http://nceus.gov.in/working_paper_1.pdf
- NSSO (2008), Review of concepts and measurement techniques in employment and unemployment surveys of NSSO, NSSO (SDRD) Occasional paper/1/2008. http://www.mospi.gov.in/nsc_paper_SDRD_12jan09.pdf