employment inequality poverty.ppt

8/10/2019 employment inequality poverty.ppt

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Employment growth, poverty

and inequality in IndiaMritiunjoy Mohanty

Indian Institute of Management Calcutta

February 2012


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Source: Mohanty (2008): Dynamics of employment generation in India

and new trends in unionisation


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Employment Shares - NSS

2005 2010Agriculture 57 52

Mining 1 1

Manufacturing 12 11EGWS


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Slow decline in rural share understatesextent of occupational and geographicaldiversification

Share of agriculture declines by nearly12%, from 68.5 to less than 57%

Share of rural non-farm increases by little

less than 6% to almost 21% Share of urban non-farm increases little

less than 7% to nearly 23%


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Construction the most significant gainer

from 2 to 6%

Servicesfrom 17 to 24%

Mostly in trade and hotels on the one hand

and transport storage and communication

on the other

Share of manufacturing from 11 to 12%,

though from 1994/94 on a rising trend


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Output shares

Agriculture declines by more than 15%, from 34 to18.5%

Manufacturing increases from 14.5 to 15.1%

Services from 38.6 to 53.7, more than 15%

Constructions share increases from 5.8 to 6.5% More or less along lines suggested by the economics of

structural changeshares of both the rural economyand agriculture have declined with increases in both ruraland urban non-farm

Only surprise is construction whose employment sharesincreases significantly more than the output share andservices whose employment share is significantly lowerthan its output


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In period III (1999-2004) per annum net new job

generation 12 million

In period II (1993-1999) net new jobs 4 million

jobless growth Better also than period I (1983-93) net new job

creation of 7 million per annum

Period II also significantly different from bothothers in the dominance of urban job generation

in that period with very low employment elasticity


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Volatility in the pattern of new job generation largely due toagriculture

In period II agriculture essentially does not generate any jobs

In terms of trends, agriculture goes from being the largest generatorof new jobs in period I to the smallest in period III

Emergence of non-farm jobs as drivers of employment growth Emergence of rural non-farm employment as driver of rural new

employment

Rising importance of rural non-farm employment generation inoverall non-farm employment growth

The rise to dominance of rural non-farm employment suggests that

urban employment shares will continue to increase but slowly But an acceleration in diversification away from agriculture

Each period has seen different drivers in term of dominantgeographiessuggesting a employment growth is undergoing atransitional phase


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Manufacturing contribution to net new jobs increases 2.5times between periods I and III

Constructions share doubles to almost 14%

Manufacturing becomes the largest generator of net new

jobs in period III Construction has a share almost equal to that of tradehotels and restaurants (a little over 14%)

Services shares declines between periods I and IIIfrom 37 to 34%

Largely due to decline in a residual category otherservices

Trade, hotels and restaurants and transport storage andcommunication increase their share 17 to 21%


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Other services (9-10% of total employment) two broadcategoriesfinancial services and community, socialand personal services

Financial services share in total increased from 1.3 to

1.5% between 1999 and 2004 Public administration and defence, education, and

personal services accounted for between 3 and 2% oftotal employment

No component of other services in a position to becomean important driver of employment growth

Diversification away from agriculture driven bymanufacturing and construction


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Manufacturing, trade hotels and restaurants, and other services (inPd III) important generator of net new urban non-farm jobs

In Pd II contraction in other services is explained largely by acontraction in personal services

In other services growth is accounted for by financial services,health, education, personal services and counterbalances a declinein public administration and defence

If these trends continue, the smaller services should becomeimportant contributors to the growth of urban non-farm employmentthough the return to growth of personal services suggests continuingslackness in the urban labour market

Construction and trade hotels and restaurants important generatorsof net new rural non-farm employment

Other services not important in rural non-farm


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Reversal of the dominance of waged

employment in Period III

Contraction in the generation of casual

employment

Sharp deceleration in the generation in

regular jobs

Period III very different than Period I in

terms of quality of jobs


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It however appears that relatively high levels of

education are a sufficient condition to be a member of

the urban formal economyeither as a holder of a

formal job (10.1 years average) or regular waged

informal job (9 years average). Therefore education appears to be a discriminator for

both quality (formal) and geography (urban). In addition,

whereas high (relatively) levels of education do not

guarantee regular waged urban formal employment, lowlevels of education do guarantee lack of access.


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The caste hierarchy

Three upper castes the Priest, the

Warrior, the Merchant(may or may not

own land) - UCH

One lower caste Tillers of land(may or

may not own the land they till) OBC

Outcaste the Dirty jobsthe Cobbler,

the Scavenger SC Dalits

divasisthe ST


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Source: Chen and Ravallion (2008)

05

101520

2530354045

1981

1984

1987

1990

1993

1996

1999

2002

2005

Poverty Ratio


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0

10

20

30

40

50

60

70

80

1981 1984 1987 1990 1993 1996 1999 2002 2005

India PRChina PR


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0

20

40

60

80

100

120

1981 1984 1987 1990 1993 1996 1999 2002 2005

China $2 PR

India $2 PR


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India

250

260

270

280

290

300

1981

1984

1987

1990

1993

1996

1999

2002

2005

India


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0

100

200

300

400

500

600

700

800

1981

1984

1987

1990

1993

1996

1999

2002

2005

ChinaIndia

ROW


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AgricultureL/O

0

0.5

1

1.5

2

2.5

3

3.5

4

1983 1993/95 1999/2000 2004/5 2009/10

L/O


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Agriculture

O/L

0

0.1

0.2

0.3

0.4

0.5

0.6

1983 1993/95 1999/2000 2004/5 2009/10

O/L


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Manufacturing

L/O

0.62

0.64

0.66

0.68

0.7

0.72

0.74

0.76

0.78

0.8

0.82

1983 1993/94 1999/2000 2004/5 2009/10

L/O

O/L

1.15

1.2

1.25

1.3

1.35

1.4

1.45

1.5

1983 1993/94 1999/2000 2004/5 2009/10

O/L


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Construction

L/O

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1983 1993/94 1999/2000 2004/5 2009/10

L/O

O/L

0

0.5

1

1.5

2

2.5

3

3.5

1983 1993/94 1999/2000 2004/5 2009/10

O/L


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From Kannan and Raveendran (2012)

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employment inequality poverty.ppt