WHY LACK OF JOBS DOESN’T LEAD TO SOCIAL STRIFE
In a discussion around employment organised by IC Centre for Governance in Delhi last Friday, former cabinet secretary Prabhat Kumar made an important observation. He said that if unemployment is a big problem then why is there no social demonstration of its angst?
Upon reflection, I feel the answer to Prabhat’s question is in the gender of unemployment.
My presentation at the discussion showed that demonetisation had led to a loss of jobs estimated between 12.7 million and 3.5 million. Possibly, the initial hit was closer to the higher end of the range and over about four months, the loss had narrowed down closer to 3.5 million.
This is not a new finding. I had presented these results first in December 2017. The paper can be accessed at https://unemploymentinindia.cmie.co m/kommon/bin/sr.php?kall=wtabnav&
What was new in the presentation was the break-up of the impact of demonetisation on male and female members. There are two important findings here.
First, men did not display much fall in their overall labour participation after demonetisation. There was a small fall in labour participation of young and old men, but this was offset by an increase in labour participation among middle-aged men.
Second, and this is important, demonetisation reversed an increase in labour participation that was seen among women before demonetisation. Between the first and second wave of CMIE’s CPHS we had seen an increase in labour participation in all agegroups of women. After demonetisation, all the gain was lost and in due course of time, women saw a big fall in labour participation rates.
Why did women leave the labour markets in big numbers when men did not? This is the important question.
There are two leads to answering that question. First, women find it a lot more difficult to get jobs than men do. Male labour participation rate is much higher than women participation rate even under normal conditions. And, in spite of a low labour participation rate, women face a higher unemployment rate. Meaning that even the fewer women who attempt to get a job, find it much more difficult to obtain one compared to men. This is the bias that society has against hiring women compared to men.
Now, when the going gets tough — as it did after demonetisation — women move out of the way to make it easier for men to get the few jobs that were available. Households took the perfectly rational decision to move men (and more experienced men) into the labour markets rather than have the women, and particularly young women, compete in the difficult labour markets of the post demonetisation period.
This point is strengthened by the second and related lead provided by the data to answer the question. Post demonetisation, there was a drop in households that had two or more persons employed.
Between January and October 2016 (the pre-demonetisation period), the share of households where two or more persons were employed was 34.8 per cent. This dropped to 31.8 per cent in the period after demonetisation. So, in the case of three per cent of the households, the number of working persons declined from more than one to just one. In a modern day and age, why should the number of working persons of a household decline? Obviously, women moved out to make way for men in a difficult situation.
Possibly, women moved out of the labour force because of the difficult labour markets after demonetisation; possibly because households have become more conservative in response to fringe religious elements; or they became more aware of women’s safety in the face of regular news of gender violence and harassment.
The drop we see in female labour participation rates is a reflection of women suffering quietly. Women do not indulge in violence or arson — that is a male preserve. But, since men did not suffer like women did, they did not find it necessary to indulge in jobsrelated violence. That is the answer to Prabhat Kumar’s question of why the lack of jobs is not translating into any overt social strife. But, I hope we are not waiting for that to happen.
The slideshow I presented at the IC Centre for Governance last week is available on the website. I welcome you to download this and take a look at a measure of a different crime against women.