Demographic Dividend, Unemployment and the Missing Women

The average age of India’s population in 2020 will be 28 years and India would be the homeland to the largest working population and yet the fear grasps our imagination whether we will miss our demographic dividend! This nightmare is not baseless given that these young citizens are not finding enough employment opportunities as would be required to exploit their skills. The sorry state of affairs is very much evident from the fact that the NSSO data, highly admired by great economists and Nobel laureates like Angus Deaton, has been suppressed and has not been released. Acting chairman of the National Statistical Commission (NSC), P.C. Mohanan and external member J. V. Meenakshi had resigned in the protest of the same. The report is supposed to not augur well for the 2019 elections for the government and hence has been sent for review. A leaked report of the unemployment survey by the NSSO had revealed that the unemployment rate is as high as 6.1%, the highest in the last 45 years in 2017-18. Infact, ignoring the numbers, just by looking around, a close relative or friend highly qualified sitting at home and ‘preparing’ for competitive exams is the new norm. The Centre for Monitoring Indian Economy (CMIE) is the only recent data source at large today and its sampling techniques are primarily the same, in fact the sample size is larger and it is conducted more frequently than the NSSO household survey. According to CMIE data, since 2016 the average labour force participation rate has been falling and this fall is more prominent for females than males. More upsetting is the fact that a higher unemployment rate prevails for females as compared to males which implies that those women who are out to seek jobs have a high likelihood of being discriminated against getting one. In CMIE data, the unemployment rate for men was 4.9% in 2018 while it was 14.9% for women in the same year. This finding is reinforced by the draft Periodic Labour Force Survey (PLFS) 2017-2018, the unemployment rate for urban women has seen a sharp spike from 2011-12. Those who had finished secondary school and above had the highest rate of unemployment across all demographics. This was particularly pronounced among urban women (about 20%). However, there is a matter of endogeneity here which is, that the ones who acquire higher education are also the ones actively looking for jobs but that doesn’t explain why the gap has been steadily rising. What are the policy takes by the government on the rising restlessness among the youth? Temporary fixes to the immediate concerns of the youth like affirmative action to make space for different sections can only redistribute (up to a limit) the same pie but not increase the size of it. What we are witnessing is majorly the anger of young men from agricultural communities and for them investing in education has not resulted in the monetary benefits that they had expected. The growth in education programmes with debatable qualities has resulted in most college graduates lacking the skill required for high paying private sector jobs and they end up getting a low-salaried one. With these transient and quick fixes we are just underplaying the seriousness and need of creating jobs that provide enough wages. The Fifth Annual Employment-Unemployment Survey Report revealed that in 2015-16, about 85% of India’s workers earned less than or up to ₹10,000 a month and only 0.5% of workers earned ₹50,000 or more. New knowledge is becoming obsolete in the blink of an eye. The private sector firms with economies of scale and technological advancements run the risk of job security and hence professionals are applying for the posts of class IV government jobs. Under this situation self-employment is the only recourse and the situation there also doesn’t seem very rosy. The MSMEs are and start-ups are facing stressful times because of a slowing economy further decelerated by demonetization closely followed by GST and instead of trying to solve their fundamental issues the government asked the RBI to consider a debt restructuring scheme. The government and the leading opposition party in the run up to elections have announced different forms of basic income promises but this cannot be provided to all and the transfer will be very basic in nature keeping in mind the fiscal deficit. The demographic dividend will play out for a few decades and to make most of it we need a healthy working population with quality education that can earn more than sustenance wage. More than three-fourths of the working population belongs to the unorganized sector and do not have job or social security, we have to bring in reforms keeping in mind especially the disadvantaged groups- lower castes and women- to move towards a more formalized work force. Recently, there had been news about the government working on a scheme to push work-from-home jobs in the IT sector by offering financial incentives to both employees and employers with the aim of employing more women. We need more out-of –the-box and creative ideas like these but the future seems bleak if the parties take up this issue only around elections.

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Alisha is presently a student at Delhi School of Economics. She has worked with Economic Research Foundation and Institute of Economic Growth.

Alisha George

Alisha is presently a student at Delhi School of Economics. She has worked with Economic Research Foundation and Institute of Economic Growth.

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