A question of jobs

Better labour market data are needed, urgently

Policymakers in India frequently have to make decisions that they hope will influence variables such as the number of jobs created, the relative purchasing power of agricultural workers and land-holders, and so on. However, worryingly, the data that are generally used to address these questions have gaps in their timing, or are incomplete in their coverage. It is welcome, therefore, that the government has chosen to move forward with an attempt to remedy this situation. The vice-chairperson of the NITI Aayog, Arvind Panagariya, recently said that a task force created last month would prioritise commissioning household-level surveys; he mentioned, specifically, that there would be an annual jobs survey and quarterly estimates of urban employment. It is hoped that these new surveys will be more reliable and comprehensive, and thus be a considerable improvement over the current situation. 

While several different estimates of unemployment and employment emerge from various state and quasi-state institutions, from 2010, the Labour Bureau in Chandigarh has also been conducting an annual employment-unemployment survey, the last iteration of which sampled 156,563 households. Any replacement survey will have to be quicker and more frequent than this survey, as well as more reliable. It will also have to look at indicators other than the simple rate of unemployment, which is not very informative in the Indian context. The data will have to be granular, and adapted to the peculiarities of the Indian labour market. For example, the survey will have to look at activity monitors, reported wages, and the frequency of changing employment. It will have to tease out structural factors such as whether employment is found directly or through a middleman. Previous surveys have suffered from respondents struggling to respond to questions about the total number of days they worked over the past year. This “recall factor” is one of the things that made the data unreliable. 

A survey that is conducted with far greater frequency might help deal with that problem.

However, just survey-based data are not enough. It is not only current employment status that policymakers need to monitor, but also jobs available, new jobs being created, and the mismatch between demand and supply for positions. The NITI Aayog committee must consider how to structure a census or a survey that provides some relatively high-frequency indication of what jobs are being created in which sector, and for individuals with what qualifications. In the absence of such data, policymakers are operating in the dark. They have no idea whether their policies are working or how they need to be tweaked. Big decisions such as demonetisation may have had an enormous impact on occupational availability, but there is no high-frequency data with which policymakers can judge the depth of the distress, if any, and what can be done to combat it. The government must move forward on addressing this need with haste. It cannot wait until just before the next elections to introduce this new system, for then the system will be fatally poisoned with politics, and will be seen as being part of election campaign talking points. The data should start emerging from this new system before the end of 2017.