Steady dip in urban unemployment rate before lockdown, finds survey

Periodic Labour Force Survey

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Periodic Labour Force Survey

In News:

  • The quarterly Periodic Labour Force Survey (PLFS) released by the Ministry of Statistics and Programme Implementation (MoSPI) showed there was a steady dip in urban unemployment rate in October-December 2019, before nationwide lockdowns began.

News Summary:

  • The Ministry of Statistics and Programme Implementation (MoSPI) has released the quarterly Periodic Labour Force Survey (PLFS) data for the quarter ending December 2019.
    • Note: Unemployment data for urban areas is released quarterly. The estimates in the quarterly survey are based on the current weekly status (CWS) of those surveyed.
  •  As per the data, India’s urban labour market was beginning to look up, despite a deceleration in GDP growth, before the Covid-19 pandemic forced a lockdown in March.
  • The urban unemployment was 7.9% in the quarter ending December 2019, compared to 9.9% in the same period the previous year.
  • In the quarter ending December 2019, 50% workers were regular wage earning or salaried workers, 38% were self-employed and 12.1% were casual workers.

Urban unemployment decline in all of 2019:

  • Till the end of 2019, statistics from the latest Periodic Labour Force Survey (PLFS) for the quarter ending December 2019 show that the urban unemployment rate had been declining for four consecutive quarters.
  • For instance, there was a trend of a decline in the unemployment rate in the quarters ending June 2019 and September 2019 as well, apart from the quarter ending December 2019.
  • Urban unemployment in the age group 15-29 years was 19.2 per cent in October-December 2019.

Labour force participation rate (LPFR) rose:

  • Labour force participation rate rose to 37.2 per cent in October-December 2019 from 36.8 per cent in the previous quarter and 36.3 per cent in the same period the previous year
  • LFPR growth higher in young people:
    • Among young people (15-29 years old), LFPR has grown more than that of the older age groups in the first three quarters of 2019-20 (compared to the corresponding periods in 2018-19).
    • The LFPR growth was 2.4%, 2.4% and 3.1% for the first three quarters of 2019 for people in the 15-29 age group.
Note: LPFR measures the share of population in a given age group which is either working or looking for a job.

About: Periodic Labour Force Survey

  • In every economy, estimation of reliable employment and unemployment data is important.
  • The National Sample Survey Office (NSSO) was historically conducting quinquennial (once in every five years) employment and unemployment surveys as part of its National Sample Surveys.
  • From April 2017, the NSSO has adopted a new employment and unemployment survey called Periodic Labour Force Survey (PLFS).
  • The first annual report of the PLFS was published in June 2019 for the period of July 2017- June 2018.
  • The PLFS has now become the major employment and unemployment data of the National Statistical Office (NSO), replacing the previous five-year surveys. It aims to aims to provide more employment data for more frequent intervals (annual and quarterly).
Note: In 2019, the National Statistical Office (NSO) was created by merging the National Sample Survey Office (NSSO) with the Central Statistical Office (CSO).
The objective of PLFS is primarily two-fold:
  • Quarterly reports: To estimate the key employment and unemployment indicators (LFPR, WPR and UR) in the short time interval of three months for the urban areas only in the Current Weekly Status (CWS).
  • Annual reports: To estimate employment and unemployment indicators in both usual status (ps+ss) and CWS in both rural and urban areas annually.
Various indicators under PLFS:
  • Labour Force Participation Rate (LFPR): LFPR is defined as the percentage of persons in labour force in the population.
    • Labour force is defined as people who are working, or seeking work or available for work.
  • Worker Population Ratio (WPR): WPR is defined as the percentage of employed persons in the population.
  • Unemployment Rate (UR): UR is defined as the percentage of persons unemployed among the persons in the labour force.
Activity Status:
  • The activity status of a person is determined on the basis of the activities pursued by the person during the specified reference period.
  • Usual Status (ps+ss): When the activity status is determined on the basis of the reference period of last 365 days preceding the date of survey, it is known as the usual activity status of the person.
    • Principal activity status (ps)- The activity status on which a person spent relatively long time (major time criterion) during 365 days preceding the date of survey, was considered the usual principal activity status of the person.
    • Subsidiary economic activity status (ss)- The activity status in which a person in addition to his/ her usual principal status, performs some economic activity for 30 days or more for the reference period of 365 days preceding the date of survey, was considered the subsidiary economic status of the person.
  • Current Weekly Status (CWS): The activity status determined on the basis of a reference period of last 7 days preceding the date of survey is known as the current weekly status (CWS) of the person.

Also Read: Who is a ‘street vendor’ in India, and what is the Street Vendors Act?

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