State of Working India 2023

Social Identities and Labour Market Outcomes

SWI2023 icon cluster

The SWI is a regular publication of Azim Premji University that aims to provide the public with an evidence-based overview of the quality and quantity of employment in the Indian economy. 

This year’s theme is Social Identities and Labour Market Outcomes. The report uses official data sources as well as primary data from a study conducted by Azim Premji University in collaboration with IWWAGE and IIM Bangalore. It discusses the progress made in removing caste, gender and religion based disparities in employment and the challenges that remain.

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, Annual Survey of Industries, and the Economic and Population Censuses. We 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 gap.

Watch this video to know more about the SWI 2023 report:

Highlights from the Report:

• Faster structural change: After stagnating since the 1980s, the share of workers with regular wage or salaried work started increasing in 2004, going from 18% to 25% for men and 10% to 25% for women. Between 2004 and 2017, around 3 million regular wage jobs were created annually. Between 2017 and 2019 this jumped to 5 million per year. Since 2019, the pace of regular wage jobs creation has decreased due to the growth slowdown and the pandemic.

• Upward mobility has increased: In 2004 over 80% of sons of casual wage workers were themselves in casual employment. This was the case for both SC/ST workers and other castes. For non-SC/ST castes, this fell from 83% to 53% by 2018 and incidence of better quality work such as regular salaried jobs increased. It fell for SC/ST castes as well, but to a lesser extent (86% to 76%).

• Caste-based segregation has reduced: In the early 1980s, Scheduled Caste workers were more than 5 times over-represented in waste-related work and over 4 times in leather-related work. This has declined rapidly over time, though it is not completely eliminated as of 2021 – 22. In the leather industry, the representation index declined sharply to 1.4 in 2021. In waste management and sewerage, the over-representation of SCs decreased to 1.6 times in 2011 before increasing slightly again.

• Gender-based earnings disparities have reduced: In 2004, salaried women workers earned 70% of what men earned. By 2017 the gap had reduced and women earned 76% of what men did. Since then the gap has remained constant till 2021 – 22.

• Connection between growth and good jobs remains weak: Since the 1990s year-on-year non-farm GDP growth and non-farm employment growth are uncorrelated with each other suggesting that policies promoting faster growth need not promote faster job creation. However, between 2004 and 2019, on average growth translated to decent employment. This was interrupted by the pandemic which caused larger growth in distress employment.

• Unemployment is falling but remains high: Post-Covid the unemployment rate is lower than it was pre-Covid, for all education levels. But it remains above 15% for graduates and more worryingly it touches a huge 42% for graduates under 25 years.

• After falling for years, women’s WPR is rising, but not for the right reasons: After falling or being stagnant since 2004, female employment rates have risen since 2019 due to a distress-led increase in self-employment. Before Covid, 50% of women were self-employed. After Covid this rose to 60%. As a result, earnings from self-employment declined in real terms over this period. Even two years after the 2020 lockdown, self-employment earnings were only 85% of what they were in the April-June 2019 quarter.

• Gender norms continue to be significant for women’s employment: As husband’s income rises, women are less likely to work. In urban areas, after the husband’s income crosses ₹40,000 per month, the chance of the wife working increases again (i.e. there is a U‑shaped relationship).

There is also a strong intergenerational effect of gender norms. Compared to households where there is no motherin-law present, married women living in households where the mother-in-law is present but not employed are 20% (rural) to 30% (urban) less likely to be employed. However, if the mother-in-law is employed herself, daughters-in-law are 50% (rural) to 70% (urban) more likely to be employed.

• Lower caste entrepreneurs are still rare: We find that even in the smallest firm sizes, SC and ST owners are under-represented compared to their share in the overall workforce. But even more significantly, SC and ST owners are barely represented among firms employing more than 20 workers. Correspondingly, upper caste overrepresentation increases with firm size.

Read the report

Know about the previous SWI reports:

State of Working India | From the past years

The findings from the SWI reports have been picked up widely: