Transition to vulnerable employment subsides in recent years: Report

After transitioning into more vulnerable employment types and out of the workforce during the Covid-19 pandemic, upward transition by urban workers in employment became more common in the last year, according to the World Bank's latest report on India.

In Q2CY2020, over 35 per cent of urban self-employed workers transitioned to casual wage work, and among salaried workers, about 40 per cent had to switch to casual wage work, with both males and females being equally impacted.

However, thereafter, fewer distress-induced job transitions occurred in Q2CY2021, and only around 20 per cent of salaried and self-employed workers transitioned either into casual-wage work or exited the labour force.

“By Q2CY2022, upward job transitions became more common i.e., workers transitioned from being unemployed to casual wage workers – 10 per cent of male unemployed workers in Q1CY2022 became casual wage workers in Q2CY2022. [However] Urban women [continued to] face both upward and downward transitions. Around 25 per cent of female casual-wage workers moved upwards into self employment and salaried work, while a similar share also moved out of the workforce,” the report noted.

The report also noted that since 2020, the female worker population ratio (FWPR) increased from 20 per cent in 2017-18 to 28 per cent in 2021-22, largely driven by women engaged in unpaid work in rural areas. In contrast, the increase in FWPR in urban areas was slight, from 16.5 per cent in 2017 to 19.7 per cent in 2022.

The report also noted the rise of ‘gig workers’ i.e. workers on a digital platform, and the contractual nature of their employment, and says that they will be an important indicator to track.

“Gig-workers are a new category of workers captured by the Consumer Pyramids Household Survey (May-December 2022) as self-employed or salaried workers on a digital platform,” the report noted.

Using digital transactions per capita data from PhonePe Pulse Dataset (2022-Q1), the report presents a share of “gig-workers” as a percentage of urban, service sector workers and the per capita transactions.

It notes that the while states such as Karnataka and Haryana have large shares of gig-workers and higher per-capita transactions, the relationship varies across states.