EMPLOYMENT
Employment is the number or percentage of people who have jobs. Employment is defined as what you do as
a paying job. Example: Some people working for a coffee shop, some work on farms, in factories, some people
work at shops, some people run their own business and few people also work at home. Employment enable
people to do work for earning. Every working persons contributes to national income and gross domestic
product by engaging in various economic activities.
UNEMPLOYMENT is a situation when people
are willing to work and able to work at an existing
wage rate, but are not getting work. Here economy
fails to create more jobs. It is a situation of not
being able to find a job. Here demand for labour
force is less.
(Labour force is the total number of people who
are eligible to work including employed and
unemployed people.
Labour force = Persons working + Persons seeking
or available for work)
Labour Force Participation Rate (LFPR)
It is defined as the section of working population in the age group
of 16- 64 in the economy currently employed or seeking
employment. People who was still undergoing studies,
housewives and persons above the age of 64 are not counted in
this labour force. The labour force participation rate should at
49.8% in 2017-18, falling sharply from 55.9% in 2011-12
Labour Supply
It is the total hours that workers wish to work at a given real wage rate.
Work Force : The number of persons who are
actually employed at a particular time are known
as work force.
It includes only those persons who are engaged
in productive activities
Work force = Labour force – Number of persons
not working but willing to work
Worker population ratio
Worker population ratio is defined as the
number of persons employed per 1000
persons.
Worker-population ratio in India (2017-18)
Worker-Population Ratio
Sex Rural Urban Total
Men 51.7 53.0 52.1
women 17.5 14.2 16.5
Total 35.0 33.9 34.7
EMPLOYMENT is an activity which enables a person to earn means of living. Employment may be either in the
form of self-employment or wage employment.
Employment Distribution (2017-18)
Nature of Employment Percentage
Self-Employed 52.2
Regular Workers 22.8
Casual Workers 25.0
Total 100
Self-employment
An arrangement in which a worker uses his own resources to make a living, is
known as self-employment.
→ Workers who own and operate an enterprise to earn their livelihood are known
as self employed.
→ About 52.2% of workforce in India belongs to this category.
→ In case of self-employment, a person makes uses of his own land, labour, capital
and entrepreneurship, to make a living.
e.g. Shopkeepers, traders, businessmen, etc.
Wage Employment (Hired Workers)
An arrangement in which a worker sells his labour and earns wages in return, is known
as wage employment. Under wage employment, worker is known as employee (or
hired worker) and buyer of labour is termed as employer.
→ Workers do not have any other resources (land, capital and entrepreneurship),
except their own labour
→ They offer their labour services to others and in return get wages for their services.
e.g. if a doctor running his own clinic is an example of self employment. However, if
the doctor is employed by a hospital, then it will be a wage employment
Two Types of wage employment are
Regular Workers
When a worker is engaged by someone (employer) or by an enterprise and is paid wages on a regular basis,
then such worker is known as regular salaried employees. Regular workers account for just 22.8% of India’s
workforce e.g. Professors, Teachers, Civil Engineer working i the construction company etc. They also get
social security benefits (like person, provident fund, etc.)
Casual Workers
Workers who are casually engaged and, in return, get renumeration for the work done, are termed as casual
workers. They are not hired on a permanent basis. This means that they do not have job security, regular
income, social benefits, casual workers contribute 25% of India workforce
Distribution of Employment by Gender
Male Workers Female Workers
Self Employed
Regular workers
24% 27%
24%
52.00% Casual workers 21%
52.00%
Distribution of employment by Region
120% Scale 1 cm = 20 Percent
100%
80%
60%
40%
20%
0%
Urban workers Rurl workers
Regular Salaried Employees 47% 13%
Casual Workers 15% 29%
Self Employed 38% 58%
Distribution of employment in different sector (2017-18)
Primary sector includes Agriculture
and Mining and Quarrying.
Secondary sector includes
Manufacturing, Construction,
Electricity, Gas and water supply.
31%
Tertiary sector includes Trade,
45% Transport, storage and services.
Primary sector
24%
Secondary sector
Tertiary sector
Distribution of Rural-Urban employment in Different sectors
Rural Employment Urban Employment
6.6%
19.8%
Primary sector 34.3% Primary sector
20.4% 59.8% 59.1%
Secondary sector Secondary sector
Tertiary sector Tertiary sector
Distribution of Employment (Male-Female) in Different Sectors
120% Scale 1 cm = 20 Percent
100%
80%
60%
40%
20%
0%
Male workers Female workers
Tertiary sector 33% 25%
Secondary sector 27% 18%
Primary sector 41% 57%
Jobless Growth
It refers to a situation where GDP of an economy
increases due to innovative technology without
increase in level of employment. Because companies
are trying to achieve their target through efficient
technology without use of manpower.
Changing Structure of Employment In India majority of population lives in rural areas and they are
majorly depending on agriculture. it shows the highest percentage of people is getting employment from
primary sector, but this percentage is continuously decreasing because of urbanization and shifting of
people from rural to urban areas. In Urban areas secondary and tertiary sector provides employment
more than primary sector because people are engaged in manufacturing and service providing.
percentage of people getting employment from secondary and tertiary sector has been increased.
Trends in Employment (sector-wise)
Sector 1972-73 1993-94 2011-12 2017-18
Primary sector 74.3 64 48.9 44.6
Secondary sector 10.9 16 24.3 24.4
Tertiary sector 14.8 20 26.8 31
Total 100 100 100 100
Casualization and Informalization of Workforce
Casualization of workforce means shift of self-employed and regular salaried employed to casual
wage work. Casual workers are defined as those who work for others in farm or non farm enterprises
and are paid wages that are daily basis or periodic basis. It is due to lack of opportunities in the
organized sector people start working as casual workers. In the last four decades (1972-2012). People
have moved from self employed and regular salaried employment to casual wage work.
Informalization of workforce refers to a situation where there is a continuous decline in the
percentage of workforce in the formal sector along with simultaneous rise in informal sector’s
workforce.
Employment may broadly classified as
1. Formal or organized sector: it includes all government departments, public enterprises and private
establishments which hire 10 or more, workers. Those working in organized sector are called ‘formal
workers. Government protect them in various ways through its labour laws and they can form ‘Trade
Unions’ to protect their interests. However organized sector provides work to just 7%
2. Informal or unorganized sector: It includes all such private enterprises which hire less than 10 workers,
besides farming and self employment ventures those working in unorganized sector are called ‘informal
workers. Informal sector workers do not get regular income they do not have any protection from the
government. Such workers have the risk of being dismissed without any compensation. In India, over 90%
employment is found in the unorganized sector, like small farms, household industries, shops and other
self-employment units. of the total workforce
UNEMPLOYMENT TYPES IN INDIA
1.Rural Unemployment
Around 70% of India’s population lives in villages. Agriculture is the single largest source of their livelihood. But
agriculture suffers from a number of problems like dependence upon rainfall, financial constraints, old
technology, etc.
Types of Rural Unemployment
Open unemployment Seasonal employment Disguised unemployment
1. Open unemployment: In the agriculture sector, there are large numbers of landless workers who are
openly looking for work. Here the person are able and willing to work at the prevailing wage rate, but
fail to get work. They can be seen and counted in terms of the number of unemployed people.
2. Seasonal employment: In India, we have mostly unirrigated land which is capable of giving only one crop
a year. Our farmers remain unemployed from 3 to 8 months a year. They have not tried to find any
alternative occupation for themselves in this period like road building, brick making, house
construction, digging wells, etc. out of laziness our farmers fail to utilize their time. So they are
employed for certain seasons only.
3. Disguised unemployment: In India there is too much pressure of population on land. As a result
productivity per person falls. Disguised unemployment occurs when the number of workers engaged in
a job is much more than actually required to accomplish.
2.Urban Unemployment
The unemployed in the urban areas have increased considerably over the year. The number of unemployed
registered in employment exchanges has increased more than eight times. In 1961, there were 32 lakh
registered unemployed, in 2008 their number rose to 270 lakh
Types of Urban Unemployment
1. Industrial unemployment: Those illiterate persons who are willing and able to work in factories or
industries in urban areas but cannot find work. Rapid rise in population and rural urban migration
increases so industrial unemployment also increased.
2. Educated unemployment: The most horrifying kind of unemployment is when the educated youth are
unable to find appropriate jobs to suit their qualifications. With an improvement in education over time,
skilled workers have increased in number but the number of available jobs has not increased
correspondingly. This cause educated unemployment.
3. Technological unemployment: This type of unemployment take place every time technology upgrades and
the existing workforce are unable to cope with new technology. if the skills required to meet the new
technology do not match the existing skill-sets of the employed workers and they can’t adopt, they
become unemployed. Upgradation is a natural process, with cyclical obsolescence as one set of
technology becomes irrelevant and gets replaced by another
Causes of Unemployment
1. Slow economic growth: A slow rate of economic growth would mean that the national output is not
increasing by much. It indicates that not enough jobs are being created to absorb the workers able and willing
to work. Simply, labour supply is more than existing job opportunities.
2. Population explosion: The number of people looking for jobs had increased over the years as population
increases. The rising population proves to be a burden on the number of jobs that can actually be created in
an economy with its limited resources.
3. Over-dependence on technology: Now a days multinational companies are trying to achieve their targes by
using more machineries instead of man power. Innovative technologies replace the demand for labours.
4. Underdeveloped Agriculture: Lack of irrigation facilities, lack of credit facilities and indebtness of farmers
leads to slow growth in agriculture.
5. Defective educational system: The prevailing education system in India is full of defects as it fails to make
any provision for providing technical and vocational education. As a result, educated people are unable to
meet the requirements of the firm.
6. Joint Family system: In joint families there is a high tendency to survive on a joint income without work. It
encourage high degree of disguised unemployment.
7. less savings and investment: Due to shortage of savings and investment opportunities of employment have
not been created. Due to lack of capital number of firms, organizations and industries are inadequate.
Remedial Measures for Unemployment
1. Increase in production: To increase employment, it is essential to increase production in agriculture and
industrial sectors. Development of small and cottage industries should be encouraged.
2. More importance to employment programmes: In five year plan more importance should be given to
employment. The programmes like irrigation, roads, flood control, power, agriculture, rural electrification
can provide better employment to people.
3. Change in education system: Educational pattern should be completely changed. More emphasis is given on
practical training and vocational education.
4. Expansion of employment exchanges: More employment exchanges should be opened. Information
regarding employment opportunities should be given to people.
5. More assistance to self employed people: Most people in India are self employed. They are engaged in
agriculture, trade, cottage and small scale industries etc. These persons should be helped financially,
providing raw, material and technical training.
6. Improvements in infrastructure: The infrastructural facilities like health, education, irrigation, electricity,
roads, etc. are critical for overall development of the economy. Better infrastructural facilities enable
agriculture and industry sector to produce to their full capacity. This will generate more employment.
7. Promotion to investment: Rate of capital formation in the country should be accelerated. Capital formation
should be particularly encouraged in such activities which generate greater employment opportunities.
Government should approach foreign countries to invest in India due to larger investment economy can
increase job opportunities. (Government of India has already started campaigns like skill India, make in India
and start up India, for the development of Indian Economy)
Sources of Unemployment Data
Currently, unemployment data is collected by several departments, agencies and ministries in India. The
primary agencies for survey and collection are:
1. Employment-unemployment survey (NSSO): It is the most comprehensive survey providing labour force
statistics in India. It was first conducted in 1955 and since 1972-73, is conducted every five years.
2. Population Census: It collect data on main, marginal and non workers. However, since census data comes
every 10 years, these figures hardly get any attention.
3. Directorate General of Employment and Training (DGET): It is the apex organization for development and
co-ordination at national level for the programmes relating to vocational training including women’s
vocational training and employment services. It provides information about the structure of employment,
occupational structure and educational profile of employees.
All Important Dates, Data & Events
Self-employed workers percentage in employment (2017-18) 52.2%
Regular workers percentage in employment (2017-18) 22.8%
Casual workers percentage in employment (2017-18) 25%
Percentage of employment in Primary sector (2017- 18) Agriculture, mining and 44.6%
quarrying
Percentage of employment in secondary sector (2017- 18) Manufacturing, electricity, gas, 24.4%
water & construction
Percentage of employment in Tertiary sector (2017- 18) Trade, transport, storage, All 31%
services, banking, insurance
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