State of Working India 2023: Social Identities and Labour Market Outcomes

Azim Premji University,

Abstract

The Indian story of economic growth and structural transformation has been one of significant achievements as well as continuing challenges. On the one hand, the economy has grown rapidly since the 1980s, drawing millions of workers out of agriculture. And the proportion of salaried or regular wage workers has risen while that of casual workers has fallen. On the other hand, manufacturing has failed to expand its share of GDP or employment significantly. Instead, construction and informal services have been the main job creators. Further, the connection between growth and good jobs continues to be weak.

When we speak of new opportunities, another important set of questions arises. Who is able to take advantage of them, and who is not? Has growth created faster improvements for marginalised groups, enabling them to catch up with more advantaged groups? This year’s report takes a detailed look at the impact that growth and structural change have had on some long-running social disparities. We show that significant progress has been made on all fronts since the 1980s, but also that there is a long road ahead. 

The report makes use of official datasets such as the NSO’s Employment-Unemployment Surveys, the Periodic Labour Force Surveys, the National Family Health Surveys, the Annual Survey of Industries, and the Economic and Population Censuses. The researchers also make use of a unique primary survey carried out in rural Karnataka and Rajasthan, the India Working Survey. This year’s report goes further than our earlier three editions and makes extensive use of regression analysis to offer more precise estimates of the impacts of structural change on employment conditions and outcome gaps.


Contents

The report consists of five data chapters, a chapter discussing measurement and data issues, and a concluding chapter. 

In Chapter Two, we start with a discussion of the recent labour market trends, covering the pre-pandemic growth slowdown and the pandemic with its aftermath. 

Chapter Three starts the long-run analysis by first examining the relationship between growth and structural change at the national and state levels since the 1980s. We examine the pace of both the Lewis and the Kuznets processes, overall and for key identities. 

Chapter Four focuses on women’s employment. We approach the issue from both a labour supply and a labour demand angle. From the supply side, we investigate the role of gender norms in allowing women to access paid work, especially outside the home. On the demand side, the data is more limited, but we show that controlling for supply-side factors such as norms and education, labour demand (availability of work opportunities) plays an important role in explaining whether women do paid work or not.

Chapter Five shows that gender, caste and religion-based identities continue to be strongly correlated with the type of employment (causal, salaried, self, etc.) as well as the quality of jobs (informal, semi-formal, formal). It also shows that intergenerational mobility has increased over time in India. 

Chapter Six examines disparities in earnings and measures the changing occupational and industrial segregation over time. It also looks at the relationship between caste and entrepreneurship.

Chapter Seven discusses several issues related to measurement of employment for women as well as the necessity for data going down to the jati level and data on religion-caste intersections. 

Chapter Eight concludes. In this concluding chapter, we return to the key points revealed by the analysis and also discuss limitations of the study.

Finally a word on the academic and policy literature in which this report is situated. There is a large amount of writing — books, articles, policy papers — on questions of gender, caste, religion and labour. It is not our intention here to review this vast literature. Where appropriate we have pointed readers to further readings on various topics, but the resulting bibliography has no claims to being exhaustive.

The analysis presented here also leaves many important and interesting questions unanswered. We have no doubt that future research will take on these questions and produce knowledge that is of practical use for the design of better policy.