RURAL LABOUR ENQUIRY (61st Round of N.S.S.) 2004–05 REPORT ON EMPLOYMENT & UNEMPLOYMENT OF RURAL LABOUR HOUSEHOLDS ( MAIN REPORT)

CHAPTER - II

MEASUREMENT OF EMPLOYMENT & UNEMPLOYMENT

1. INTRODUCTION

            Indian economy is a developing economy. The nature of employment and unemployment, therefore, sharply differs from industrially advanced economies. Indian economy, is predominantly a rural economy, where two-third of its labour force is still dependent on agriculture. Subsequently, the bulk of unemployment in India, also manifest itself in rural areas. The rural unemployment has two aspects viz. seasonal and perennial. The agriculture which is the principal occupation in rural India, is by nature a seasonal occupation. It is estimated that at least for five to seven months a year, depending upon conditions, the agricultural workers face seasonal unemployment. The second aspect of rural unemployment, is its perennial under-employment or chronic disguised unemployment. The increase in population, without corresponding increase in cultivatable land, has resulted in under employment or disguised unemployment and it is of perennial nature. The National Sample Survey Organisation (NSSO) conducts Employment & Unemployment Surveys, regularly on quinquennial basis to measure inter-alia employment & unemployment situation in the country. As in rural areas, the level of employment and unemployment to a greater extent depends on normal monsoon, floods and drought conditions in the country, the measurement of employment and unemployment situation, therefore, becomes quite difficult.

             This chapter contains the methodology employed for quantitative estimates of employment and unemployment over successive enquiries.

 2. METHODOLOGY FOR QUANTITATIVE ESTIMATES OF EMPLOYMENT AND UNEMPLOYMENT 

 2.1       In order to generate better estimates of employment and unemployment, the concepts and definitions of employment over successive enquiries have been modified without affecting comparability with previous surveys.  In the first Agricultural Labour Enquiry (1950-51), wage employment for half a day or more was counted as full day’s occupation and less than that was ignored.  All those persons who worked even for a day during the reference period of a month were taken to have been gainfully employed.  In respect of unemployment, firm data were collected only from those adult male labourers who reported wage paid employment in each month.  Thus, for those labourers who did not report wage-paid employment, it was assumed that they were self employed for that period.  Such persons accounted for about 14 per cent of the total adult male labourers.  It was observed that the employment data of the first Agricultural Labour Enquiry were somewhat imprecise and tended to be on higher side.  In this survey, an independent estimate of days of unemployment was not attempted to.  The days of unemployment was estimated by deducting the number of days of wage-paid employment and self-employment from a total of 365 days. 

 2.2       In the second Agricultural Labour Enquiry (1956-57), the time spent approach was adopted by recording the number of days spent on different economic activities in which the members of the household were engaged during a reference period of one week.  The basic classifications of activity pattern adopted were ‘at work’; ‘unemployment due to want of work’; ‘not at work but with job’; ‘enterprise’ and ‘activities outside labour force’. The primary classification ‘at work’ was further divided into wage-employment comprising agricultural labour, non-agricultural labour, employment on salary basis, self employment by way of cultivation of land and other types of self employment.  The basic classification ‘not at work but with job’ was sub-divided according to reasons like sickness, weather conditions, ceremonials and rest or holiday.  It also took into account the intensity with which the activity pattern, major or minor, was followed.  Four intensity classes were laid down for the purpose, viz; full, half, nominal and nil.  A full day’s work meant three-fourth or more of the normal working hours.  One-fourth or more and less than three-fourth of normal hours was considered as work with ‘half’ intensity.  Less than one-fourth was deemed as nominal work, with one-eighth intensity and ‘nil’ intensity signified no work done during the reference period.

 2.3       The scope of the third Enquiry (1963-65) was widened to cover Rural Labour Household instead of Agricultural Labour Households alone covered in previous enquiries and renamed as Rural Labour Enquiry.  Though the concepts and methodology used in first Rural Labour Enquiry remained the same as in Second Rural Labour Enquiry, a slight variation had been introduced in presenting the data on employment.  While in the second Agricultural Labour Enquiry, the number of days by which the total days of employment and self-employment fell short of 365 days were treated as days of unemployment, in the first Rural Labour Enquiry, only those days on which there was no economic activity at all due to non availability of work, i.e. days of ‘nil’ intensity had been deemed as days of unemployment.

 2.4       The basis for estimating unemployment in the second Rural Labour Enquiry (1974-75) was the same as in the first Rural Labour Enquiry i.e. only those days on which there was no economic activity at all due to non availability of work.  In other words, days of ‘nil’ intensity have been deemed as days of unemployment.

 2.5       With a view to narrowing down the gap between two successive enquiries, the third Rural Labour Enquiry (1977-78) and all other subsequent enquiries have been integrated with the general ‘Employment & Unemployment’ surveys of the NSSO which are conducted on quinquennial basis.  The concepts and methodology for our enquiry have also undergone a change and have been brought in conformity with the new conceptual frame-work expounded in the recommendations of the ‘Expert Committee on Unemployment Estimates set up by the Planning Commission in 1969 (Dantwala Committee) on the basis of which NSS 27th round (1972-73) survey on ‘Employment & Unemployment’ was conducted. Though the basic conceptual frame-work for1977-78 survey remained unchanged as that of 27th round of NSS, yet a few changes were made in regard to (i) the definition of ‘usual status’ for classification of the population based on major activity criterion and (ii)  the structure and content of probing  questions included in the survey.   Attempts were also made for the first time during this survey to collect data on the subsidiary gainful status, if any, of persons reporting principal usual status as ‘not working’ according to the major activity criterion.  Thus, the 1977-78 survey provided estimates of two types of ‘usually employed’ viz: those categorised as ‘working’ in the principal status and those categorised as ‘working’ only in subsidiary status.  The 1983 Survey (fourth RLE) methodology was kept as a ‘no change model’ retaining the same conceptual frame work as in 32nd round.  This was done to maintain the comparability between the two rounds.  The 1987-88 survey while making no change in the existing conceptual frame work, made some alteration in the sample design in order to cover more households belonging to higher income group.

 2.6       In view of experience gained  from the previous quinquennial surveys and keeping in view the need for further refinements in the concepts and procedures and also for wider coverage in the light of international practice, during 50th round (1993-94), without affecting the comparability with the previous surveys, the following changes were effected:

 i)              The current weekly status (CWS) of a person in the past surveys was first assigned on the basis of response to the questions relating to his participation in gainful/non-gainful activities and thereafter daily time disposition data was collected from only for those in labour-force as per CWS.  In 1993-94 round daily disposition data was collected for all the persons surveyed and CWS was determined on the basis of this time disposition data.

ii)             In case of those persons who were unemployed on all the days of the reference week, certain probing questions pertaining to their educational background, spell of unemployment, industry occupation of the last employment, reasons for leaving employment, etc. were introduced.

iii)            To know the economic activities of the children (5-14 years) a set of probing questions were introduced.

iv)           Certain modifications have been made in the probing questions meant for employed persons according to usual status to obtain a better view of the underemployment situation.

v)            In conformity with the international standard the term ‘gainful activity’ has been replaced with ‘economic activity’.  However, the coverage of activities under the new term has been kept same as in the earlier rounds, except for the inclusion of ‘own account production of fixed assets’ as a work related activity.

vi)           In the past NSS, identification of usual status involved a trichotomous classification of persons in the ‘employed’, ‘unemployed’ and ‘out of labour force’ based on majority time criterion.  In the 1993-94 survey, two stage dichotomous procedure, involving first stage classification into ‘labour force’ and ‘out of labour force’ and in the second stage labour force into ‘employed’ and ‘unemployed’, has been introduced.

2.7         For finalizing the survey methodology and schedules of enquiry of the 55th round (1999-2000), a Working Group was set up. Considering all the aspects of current data demand and usefulness of the survey results, the Group has suggested a few improvisations, additions and deletions in the content of the Schedule of enquiry for the 55th round survey which are given below:-

a)            Instead of recording the details for one subsidiary usual economic activity of all the members of the household, the details of two subsidiary usual economic activities pursued for relatively more time were recorded.

b)            Certain probing questions, to identify the employment in the unincorporated enterprises (i.e. the proprietary and partnership enterprises other than those covered under Annual Survey of Industries), were asked from the workers according to usual principal as well as subsidiary statuses. In addition to it, information to identify ‘home workers’ was also  collected in this round.

c)            In addition to the information on the changes undergone in industry and/or occupation of the usually employed persons during last 2 years, provisions have been made to record changes in the status of work as well as the establishment of work during the same reference period. In all such cases where changes in any of these was reported, the pervious position for the person in that regard was also ascertained.

d)            Migration particulars of each of the members of the sample household were collected as was done in the fourth quinquennial survey (NSS 43rd round).

e)            Probing questions, were asked to get data on participation of persons in specified household chores, which were put only to females instead of all persons, usually engaged in household chores.

f)             The set of probing questions for the children (5-14 years) to get information their school attendance and participation in economic activities in earlier rounds  were dropped in this round.

g)            The schedules on Employment-Unemployment and Consumer Expenditure were canvassed in independent sets of households. Since the monthly per capita expenditure of a household is an important classificatory variable for the study of employment and unemployment, provisions were made in the employment Schedule to record household expenditure on broad groups of items, so as to work out monthly per capita expenditure of the household.

h)            A sub-sample of FSUs was repeated in two consecutive sub-rounds. The households selected and surveyed in a sub-round were re-visited in the next sub-round for collection of data on employment and unemployment only. The newly formed households, if found, during the second visit to the FSU constituted the second-stage stratum 9 and a sample of households was selected from them for canvassing Schedule 10 (and not Schedule 10.1)

2.8       In the eighth quinquennial survey on employment and unemployment which was integrated with 61st round (July, 2004 – June,2005) of NSS, apart from the information usually collected in the quinquennial rounds, information on some new items has been collected.  This has been done following the suggestion made by the Working Group set up to finalise the survey methodology and schedules of enquiry of the 61st round.  Some of the more important among them, which have enlarged the scope of the survey, are stated below: 

a)         Certain information on informal employment has been collected from all usual status workers with respect to their principal work activity and/or their subsidiary activity engaged in non-agricultural sector as well as in the agricultural sector excluding only growing of crops, market gardening, horticulture and growing of crops combined with farming of animals.  Indeed, according to NIC – 98, information on informal employment has been collected from usual status workers engaged in industry groups 012, 014, 015 and division 10 to 99.

 b)         In the employment and unemployment surveys, data on wages have so far been collected for the employees according to the current daily status.  In the 61st round survey attempt has been made to assess the quality of self-employment in terms of the earnings through certain probing questions.  From the self employed persons according to the usual status, information on two items viz. ‘whether earning from self–employment was remunerative’ and ‘what amount per month was considered remunerative’ was collected in terms of codes.

c)         Information on vocational training receiving/received by the persons of age 15 to 29 years has been collected.  Further, among those who have received or are receiving ‘formal vocational training’, information on the ‘source from where degree/diploma/certificate received/ to be received’, ‘duration of training’ and field or training’ has  been collected.

 d)         Information on ‘voluntary participation without remuneration in production of goods and services’ has been collected for those members of the household who were not workers, considering both principal and subsidiary status, as per existing production boundary followed by NSSO.

  e)        Instead of collecting information on skill, information on ‘seeking or available or suitable for the type of occupation’ has been collected for the persons of age below 75 years who are not employed in the usual principal status.

 f)          Information on ‘period of seeking/availability for work during the last 365 days’ has been collected for all the persons of age 5 years and above.  In the earlier quinquennial rounds, this information was collected only for those who were unemployed in the usual principal status.

 2.8.1    In these surveys, the population belonging to different activity categories was classified into (i) economic activity and (ii) non-economic activities. The activity situation in which a person was found during a reference period with regard to the person’s participation in economic and non-economic activities, a person could be in one or a combination of the following three broad activity statuses during a reference period:

 (i)  working or being engaged in economic activity (work),

(ii) being not engaged in economic activity ( work) but either making tangible efforts to    seek ’work’ or being available for ‘work’ if the ‘work’ is available, and

(iii) being not engaged in any economic activity (work) and also not available for ‘work’.

 Broad activity statuses mentioned in (i) and (ii) above are associated with ‘being in labour force’ and the last with ’not being in the labour force’.  Within the labour force, broad activity status (i) is associated with ‘employment‘ and that of (ii) with  ‘unemployment’.

2.8.2    Identification of each individual into a unique situation could pose a problem when more than one of the three broad activity statuses listed above were concurrently obtained for a person.  In such an eventuality, the identification uniquely under any one of the three broad activity statuses was done by adopting either the major time or priority criterion.  The ‘Major time criteria’ was used for classification of persons according to the ‘usual activity status’ approach and the ‘priority criterion’ for classification of persons according to the ‘current activity status’ approach.  Each of the three broad activity statuses was further sub-divided into several detailed activity categories.  If a person categorised as engaged in economic activity by adopting one of the two criteria mentioned above was found to be pursuing more than one economic activity during the reference period, the appropriate detailed activity status code was allotted relating to that activity in which relatively more time had been spent.  A similar procedure was adopted for assigning detailed activity code for persons categorised as engaged in non-economic activity and pursuing more than one non-economic activity.  The detailed activity categories under each of the three broad activity statuses used in the survey are stated below:

  WORKING (OR EMPLOYED)

      1.   worked in a household enterprise (self-employed) as an own-account worker;

2.   worked in a household enterprise (self-employed) as an employer;

3.   worked in a household enterprise (self-employed) as ‘helper’;

      4.   worked as a regular salaried/wage employee;

      5.   worked as a casual wage labour in public of works;

      6.   worked as a casual wage labour in other types of works;

      7.   did not work due to sickness though there was work in household enterprise;

      8.   did not work due to other reasons though there was work in household enterprise;

      9.   did not work due to sickness but had regular salaried/wage employment;

      10. did not work due to other reasons but had regular salaried/wage employment,

 NOT WORKING BUT AVAILABLE FOR WORK (OR UNEMPLOYED)

     11.   sought work,

    12.   did not seek but was available for work.

 NEITHER  WORKING NOR AVAILABLE FOR WORK (OR NOT IN LABOUR FORCE)

    13.    attended educational institutions;

   14.    attended domestic duties only;

   15.    attended domestic duties and was also engaged in free collection of goods (vegetables, roots, fire-wood, cattlefeed, etc.,) tailoring, weaving etc., for household use.

   16.    rentiers,  pensioners, remittance recipients, etc.,

   17.    not able to work due to disability;

   18.    beggars, prostitutes etc;

   19.    others;

   20.    did not work due to sickness (for casual workers only)

   21.     children of age 0 – 4 years.

 (Sl.No. 7,8,9,10,12and 20 are applicable only in the case of current weekly and current daily status approaches.)

2.8.3   Further, the population as belonging to different economic activity categories, were classified independently by adopting three different approaches, namely (i) the usual status approach, (ii) the subsidiary economic status approach and (iii) the current weekly status approach.  The details of these three different approaches are as under:-

 (i)   USUAL ACTIVITY STATUS

 The usual activity status relates to the activity status of a person during the reference period of 365 days preceding the date of survey. The activity status on which a person spent relatively longer time (major time criterion) during the 365 days preceding the date  of survey is considered the principal usual activity status of the person. To decide the  principal usual activity of a person, he/she  is first categorised as belonging  to the labour force or not, during the reference period on the basis of major time criterion. Persons, thus, adjudged as not belonging to the labour force are assigned the broad activity status ‘neither working nor available for work’. For  the persons belonging to the labour force, the broad activity status of  either ‘working’ or ‘not working but seeking and/or available for work’ is then  ascertained again  on the basis of the relatively longer time spent  in the labour force during the 365 days  preceding  the date of survey. Within the broad activity status  so determined, the detailed activity status category of a person pursuing more than one such activity will be determined again on the basis of the relatively longer time spent.

 (ii) SUBSIDIARY ECONOMIC ACTIVITY STATUS 

A person whose principal usual status is determined on the basis of the major time criterion may  have  pursued some economic activity for a relatively shorter time (minor time) during the reference period of 365 days  preceding the date of survey. The status in which such economic activity is pursued is the subsidiary economic activity status of the person. In case of multiple subsidiary economic activities, the major two activities and their statuses based  on the relatively longer time spent criterion will be considered . It may be noted that engagement in work in subsidiary capacity may arise out of the two following situations:

 (a)        a person  may be engaged for a relatively longer period during the last 365 days  in economic/non-economic activity and for a relatively shorter period in another economic activity and

 (b)        a person may be pursing one economic/non-economic activity almost through out the year in the principal usual activity status and also simultaneously pursuing another economic activity for a relatively shorter period in a  subsidiary capacity.

 (iii)       CURRENT WEEKLY ACTIVITY STATUS

  The current weekly activity status of a person is the activity status obtained for a person during a reference period of 7 days preceding the date of survey. It is decided on the basis of a certain priority cum major time criterion. According  to  the priority  criterion, the status of ‘working’  gets  priority over the status of ‘not working but seeking or available  for work‘ which in turn gets priority over the status of ‘neither working nor available for work‘.  A person is considered working (or employed), if he/she, while pursuing any  economic activity,  had worked  for at least one hour on at least one day during the 7 days  preceding the date of survey. A person  is considered  ‘seeking or available for work (or  unemployed)’ if during the reference week no economic activity was pursued by the person but  he/she  made efforts to get work or had been available for work any time during the  reference  week though not actively seeking work in the belief that no work  was  available. A person  who  had neither  worked nor was available for work any time  during  the reference week, is  considered  to be engaged in non-economic   activities (or not in  labour force) .  Having decided the broad  current weekly activity status of a person on the basis  of   ‘priority’  criterion, the  detailed current activity  status is again decided on the basis of  ‘major  time criterion’ if a person is pursuing multiple economic activities.