Centre for Development Economics
Department of Economics

Delhi School of Economics


Understanding Changes in Urban Indian Unemployment: An Examination of PLFS Data (Paritosh Nath and Rahul Menon)


Rahul Menon (O.P. Jindal Global University)
(Thursday,12 January 2023, 3:15 PM IST)
Venue: AMEX Room

The question of unemployment in India has never received serious attention from economists, owing to low unemployment rates characteristic of a developing economy. However, the release of the Periodic Labour Force Survey (PLFS) of 2017-18 and the lockdowns imposed in March 2020 have brought the question of unemployment to the forefront. Though unemployment rates have reduced in the aftermath of the pandemic, there has not been much work examining the factors that have impacted and driven these changes.
Using methodological innovations introduced in the PLFS, this paper studies urban unemployment between 2017-18 to 2020-21. We study and quantify the rates of flows into and out of unemployment to better understand the factors driving unemployment, and disaggregate our results by gender. While unemployment rose in the lockdown, it reduced immediately after, owing to high rates of job creation. This increased rate of employment creation was short-lived, indicating a re-absorption of employment lost during lockdown rather than sustained dynamism. A persistent feature of unemployment is the significantly higher rates of unemployment for women, with women suffering lower rates of employment generation compared to men. A significant change that has been observed is a reduction in transitions out of the labour force, particularly with respect to women. More individuals remain in the labour force, either holding on to employment or searching for new employment. While unemployment rates have reduced, this has meant a greater proportion of individuals remaining unemployed across quarters. Further study is necessary to see whether these are temporary changes or signal a permanent change in behavioural patterns.

All are cordially invited.

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