Depleting youth keeping job growth slow, says ILO

The country has been recording improvement in labour productivity without job creation since 2000

The number of youth in the labour force in South Asia and in India has been decreasing over successive years. A recent report of the International Labour Organisation attributes this withdrawal of youth from the labour force for the stagnation in employment rates in the region in general and in India in particular.

India has been recording improvement in labour productivity without job creation since 2000, with just 2.7 million jobs created from 2004-05 to 2009-10 in comparison with 60 million jobs during the previous five year period.

The ILO in its latest Global Employment Trends report 2013 suggests that one of the key reasons for this stagnation in employment rates is the withdrawal from the labour force by young people and women. It says that even where jobs have been created, a large share of workers remained in agriculture, in the urban informal sector or in unprotected jobs in the formal sector.

Thus, like many regions, growth has failed to deliver a significant number of better jobs in the formal economy in South Asia.'' Most notably in India, the share of formal employment has declined from around 9% in 1999–2000 to 7% in 2009–10, in spite of record growth rates."

Using a comparable definition for the latest year available, the share of workers in informal employment in the non-agricultural sector is 83.6% in India (2009–10), 78.4% in Pakistan (2009–10) and 62.1% in Sri Lanka (2009).

The report does not make any predictions about the future of job growth in India in particular and South Asia in general saying that ultimately, while the process of structural transformation in South Asia has begun, its scope and direction is uncertain.

"In particular, it remains unclear whether the manufacturing sector will be able to absorb large numbers of job-seekers in countries like India. The  share of employment in agriculture is still large in India (51.1% in 2010) and Nepal (65.7% in 2001), while the service sector represents a major share in most countries, particularly in the Maldives (60% in 2006) and Sri Lanka (40.4% in 2010). The share in industry does not exceed 25% in South Asia, and is in fact much lower when looking at just manufacturing workers. For example, in India, the share of workers in manufacturing was just 11% in 2009– 10, no higher than a decade earlier,’’ it points out.

A senior ILO official said that the withdrawal of youth from the labour force in India could be due to positive reasons like more and more people being engaged in education.