Some Aspects of the Trends in Employment and Unemployment in Bihar and Kerala since the Seventies

SCID Working Paper 324





Nearly sixty percent of India’s labor force is still engaged in low-productivity primary activities in agriculture and also in the informal sector. There is also a wide-spread belief that acceleration in growth of real GDP since the 1980s has not significantly affected the employment trends. In particular, it is claimed that the period of systemic reforms since 1991 has also been a period of “jobless” growth. Unfortunately, the analysis of employment structure and trends is hampered by the absence of time series data on employment using common definitions of employment, unemployment, and participation in the work force going back to the 1950s. However, since the early 1970s, the National Sample Survey (NSS) has collected data on employment and unemployment on a comparable basis. This paper analyzes levels and trends in employment, unemployment, and participation in the work force as well as employment status (wage/salary work, casual labor, and self-employment), using NSS data for the States of Bihar (arguably the poorest) and Kerala (undoubtedly the most advanced in terms of social indicators). It finds that, barring some exceptions, male and female rural and urban rates of employment (proportion of employed in the population over age five) in Kerala and in Bihar were below the corresponding all-India rates. In terms of time trends, the employment situation has not changed for the worse in Kerala; in Bihar, there is a significant negative trend for the levels and trends in unemployment by most indicators. It finds no convincing evidence for jobless growth during the reform era. The paper concludes with some policy implications suggested by the analysis.