Unemployment Fluctuations in Urban Labour Market in India

Jitender Singh ()
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Jitender Singh: Indian Economic Service

The Indian Journal of Labour Economics, 2023, vol. 66, issue 1, No 5, 111 pages

Abstract: Abstract Fluctuations in unemployment rate have been widely studied in developed countries. Lack of panel data, however, limited the scope of such studies in India until quarterly periodic labour force surveys (PLFS) were published in 2019. Here we use the novel quarterly PLFS of urban sector in India to study the gross flows using three states of labour market. We found most of the fluctuations in unemployment rates originates within the labour force. In upturn, employment margin contributes about 80% of the decline in unemployment, while in downturn it contributes about 98% of the rise in unemployment. Flows from employment to unemployment have stronger association with the fluctuations in unemployment rate than the flows from unemployment to employment. Higher female unemployment rates are mainly because of their lower chances to find job and higher chances to stay as unemployed. Contrary to widely held view, we found females are more likely to participate than males. Their higher probability to drop out of labour force and lower chances to find a job hold their labour force participation rate low. Youth face higher chances to lose jobs and their longer stay as unemployed than mature hold their unemployment rates higher. Difficulty in finding a job, higher chances of job loss, along with longer stay as unemployed keep unemployment rate higher among the better educated.

Keywords: Job separation; Job finding; Gross flows; Unemployment rate; Rotational panel data; Attrition bias (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1007/s41027-022-00417-2

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