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Here is why comparing the recent job data with past data is faulty and foolish

The PLFS needs to be seen as a new series for measuring employment and unemployment on an annual basis.

In January this year, some data on jobs from the Periodic Labour Force Survey (PLFS) conducted by National Sample Survey Office (NSSO) was leaked, which had created a big furore in the country. Based on the leaked incomplete data, several media houses and intellectuals had claimed that India’s unemployment rate for the year 2017-18 was at the highest level in 45 years. Opposition parties had used such analysis based on incomplete leaked data to attack the government before and during the Lok Sabha elections.

Today the Periodic Labour Force Survey report was officially released by the Ministry of Statistics and Programme Implementation. Going through the same, it can be said that there can be nothing farther away from the truth than saying that unemployment in India is at a 45 year low! The report confirms the leaked figure of 6.1% unemployment rate, but there are crucial details which make the difference. The report shows that the method to calculate jobs data has been changed, hence it can’t be compared with past data.

The unemployment rate for different social groups during 2017-2018

Past jobs data was measured using the expenditure of households as a criterion. The current jobs data uses education as a criterion instead of expenditure. This means this has become a perfect ‘apples to oranges’ comparison.

In India, the labour force surveys (Employment and Unemployment Surveys or EUS) have usually been bundled along with the household Consumer Expenditure Survey, conducted typically once in 5 years. The employment and unemployment surveys conducted by the National Sample Survey till 2011-12 used the monthly per capita expenditure of the household in the selected villages/blocks as a basis for stratification of households.

In the Periodic Labour Force Survey (PLFS) conducted for the year 2017-18, a decision was taken to use education levels as a criterion for stratification at the ultimate level.

This change in criteria from monthly per capita expenditure to education levels has direct implications on the comparability of the results of PLFS with the EUS of earlier years. In view of this, the PLFS needs to be seen as a new series for measuring employment and unemployment on an annual basis.

It is important to note that with the rise in education levels in the economy and rise in household income levels, the aspiration levels of educated youth have also risen. Thus, they may no longer be willing to join the labour force or workforce requiring low skills and low remuneration. The PLFS results give the distribution of educated and unemployed persons across the country which can be used as a basis for skilling of youth to make them more employable by industry.

There are various facets to the employment and unemployment scenario and no single data source is complete by itself. These data sets need to be supplemented by data from other sources so as to collectively give a holistic picture of the overall employment market. In this direction, the Ministry has been bringing out a compilation of new subscribers to EPFO, ESIC and NPS to give an assessment of changes in the formal market employment. The PLFS survey data complemented by administrative data and data from other sources need to be triangulated to get a complete picture.

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