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  • CSE Rahul paari42 July2021
    Published
    Authors

    Abstract

    Using two rounds of the Periodic Labour Force Survey (PLFS) covering the periods 2017 – 18 and 2018 – 19, we construct a panel of urban Indian individuals aged 15 to 65, and analyse the dynamics of their participation – or non-participation – in the labour force. We construct transition probabilities to study the movement of individuals through three distinct statuses — employment, unemployment and non-participation – at the aggregate level and for different demographic groups. We find evidence of considerable movements from the labour force to non-participation; there exists a significant discouraged worker effect as well as a pronounced movement from employment outside the labour force, specifically for women. A majority of those unemployed in the beginning of the year remain so at the end of the year, indicating the presence of long-term unemployment. The reduction in unemployment rates from 2017 – 18 to 2018 – 19 hides significant weaknesses in Indian urban labour markets. This study represents an original contribution to the field of Indian labour economics, given the paucity of large-scale studies of the dynamics of Indian labour.

    Authors:

    • Rahul Menon
    • Paaritosh Nath

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