Growth and Structural Transformation of the Workforce: Are we Heading in the Right Direction?

Abstract

In India, after a period of jobless growth from 1993-94 to 1999-2000, the workforce saw an escalation in employment rate during the period from 1999-2000 to 2004-2005 (which was seen as a form of distress employment), followed by a stagnation in employment rates during the next 5 years. During the recent period from 2004-05 to 2009-10, the women workforce declined sharply throughout all age groups, while the workforce of men increased almost equally above the 24 year age group. Agriculture is still the largest employer in India, but it continues to have the lowest gross value added per worker. There has been a slight structural shift of employment away from agriculture due to women (mostly in the rural areas). The sectoral shift of the GDP in the favour of the services sector has not been successful in making corresponding changes in employment patterns. The industrial sector has shown promising results in terms of absorption of surplus agricultural labour, mainly in the construction sector, which is casual in nature. Category wise disaggregation of workforce showed a significant increase in regular employment, while the casual labour segment seems to have picked up a large part of the decline in self-employment. Still, a large part of the women workforce is concentrated in the low productivity agricultural sector and very few women in are engaged in regular employment, which is the best form of employment. The present paper critically examined the trends in growth rate and structural changes in employment during the period from 1983 to 2010, especially since the economic reforms.