Six states report fewer formal jobs for youth in Sept qtr, shows EPFO data

Experts attribute drop to large-scale of migration; young from these states stand to earn significantly more, post migration, than they do by staying back

Six of the 22 major states and Union Territories (UT) in the country generated fewer formal jobs for the youth in the September quarter than they did in the corresponding quarter a year ago, a Business Standard analysis of the data released by the Employees Provident Fund Organisation (EPFO) shows.

States like Punjab (-12.4 per cent), Himachal Pradesh (-10.3 per cent), Jharkhand (- 7.2 per cent), Assam (-3.7 per cent), Gujarat (-3.4 per cent) and Rajasthan (-.1.1 per cent) saw a further decline in the number of net new subscribers in the second quarter (Q2) of FY23 compared to the last year. None of the north-eastern states, save Assam, were included in this analysis.

This is crucial, as subscribers in the 18-28 age group are seen as first-timers in the labour market, and reflect the robustness of the job market.

Rituparna Chakraborty, co-founder and executive director, TeamLease Services, says the fall in EPFO numbers for the young is due to the large-scale of migration (domestic and international) that takes place in these states.

“Young people in these states stand to earn significantly more, post their migration, even if they engage in informal jobs outside these states, than they do by staying there”, she added.    

However, 15 states along with Delhi saw their young net new subscribers rise in Q2 of FY23, with Bihar (36.7 per cent) leading the chart, followed by Delhi (29.1 per cent), Telangana (22.8 per cent) and Andhra Pradesh (20.8 per cent). Other such states include Haryana, Kerala, Maharashtra, Uttar Pradesh, West Bengal, Chhattisgarh, Karnataka, Tamil Nadu, Himachal Pradesh, Madhya Pradesh, Odisha, Jammu & Kashmir.

Among the states, Maharashtra (76,497) added the highest new net subscribers, followed by Haryana (36,947) and Telangana (33,421), whereas Delhi (54,055) leads the chart among the UTs in Q2 of FY23.

However, Himanshu, professor at Centre for Economic and Social Planning, Jawaharlal Nehru University (JNU) says that the number of EPFO subscribers isn't exactly reflective of the formal employment situation in these states, as an existing employee can also subscribe to EPF.

“In recent years, the government provided incentives to the firms to increase formalisation, which resulted in an increase in EPFO subscriptions. Once this happens, there is limited scope for further growth in these states and that is what is reflected in the numbers for these states”, he added.      

This comes in the wake of the latest quarterly Periodic labour Force Survey (PLFS) data released by the labour ministry last week that maps both the formal and informal employment. 14 states had a youth unemployment rate higher than the national average, with Kerala (35.3 per cent) leading the chart, followed by Rajasthan (31.8 per cent) and Chhattisgarh (31.5 per cent).