Why should we follow a cautious approach while interpreting the ‘usual status’ employment measures?
According to the Periodic Labour Force Survey (PLFS) rounds, the Indian economy witnessed a significant rise in female work force participation rate (FWPR) over the recent years, reaching 36% in 2022-23 from 22% in 2017-18.This rise is notably higher in rural areas, increasing from 24% to 41%, compared to the urban FWPR, which rose from 18% to 24% over the same period.However, concluding that this increase represents an unambiguous improvement in women’s labour market conditions would be misleading. This is partially due to these employment measures not informing on various other aspects of quality of employment, including the extent of underemployment. These FWPR estimates are based on identifying economic participation under the ‘usual principal and subsidiary status’ or interchangeably called the ‘usual status’ measure of employment.
The ‘usual status’ is the most widely reported statistical measure of employment across all domains. Although the recent ‘usual status’ trends indicate higher engagement of women in economic activities overall, these estimates should be interpreted with caution as these measures assign the status of being employed to individuals with significantly different durations of economic engagements. The usual activity status of a person is determined based on both usual principal status and usual subsidiary status. According to the definition of usual status, a person is considered employed if they meet either the principal status criterion (employed for at least six months in a year) or the subsidiary status criterion (employed for at least 30 days but less than six months in a year). The subsidiary economic engagement is considered to define the employment status of a person only when the individual isn’t employed according to the principal status criterion. But the duration of engagement in subsidiary activities is mostly significantly less than principal employment. The usual status approach doesn’t differentiate between principal status and subsidiary status workers and adds them together to estimate the workforce participation rates. Consequently, the usual status measures fail to reveal the underemployment existing among subsidiary workers without any principal engagement. Therefore the drawback of a broad measure like usual status which includes the subsidiary engagement in defining employment is the inability to capture the underemployment.
We understand the risk with narrower measures like usual principal status as it undercounts the extent of activities taking place in the informal and subsistence economies, which are mostly seasonal in nature. Thus the usual principal status measure gives us a closer picture for only those with stable employment conditions all throughout the year as it happens largely for working-age men. But it fails to measure women’s workforce participation adequately and this underestimation is significant for rural women because of their high share of engagement in short-term seasonal opportunities majorly in the agricultural sector. As the PLFS 2022-23 reveals, among the rural women solely engaged in subsidiary activities, approximately 82% are involved in agricultural activities majorly as unpaid family workers/own account workers. So, while it is important not to gloss over the subsidiary engagements where women participate significantly and capture the various activities extensively, as the broad employment measures do, we must also be mindful of the perils of interpreting the changes in these broad measures without looking into the granular details. We need to delve deeper to understand whether the change is driven by principal or subsidiary engagements. This is imperative for a better understanding of the extent of underemployment among the workers as the duration of economic engagement is one of the metrics of underemployment and it differs significantly between principal and subsidiary activities.
As we distinguish among women workers based on the principal and subsidiary engagements, we find that over the period of 2017-18 to 2022-23, the share of women solely in subsidiary engagement has risen from 10% to 23% at all-India level, with the share rising from 12% to 26% among rural women and 6% to 12% among urban women. This indicates that the increase in FWPR over the recent years, is significantly driven by an increase in subsidiary engagements. These shares are much lower for men as the shares of male workers engaged only in subsidiary activities are 3% at all-India level, 3% in rural areas, and 2% in urban areas in 2022-23. The shares reveal the higher underemployment existing among women workers, and more so in rural areas, in comparison to male workers.
Also, when we compare women’s labour market participation across the states based on usual status estimates, we need to tread with caution. According to PLFS 2022-23 usual status measures, in case of few states with rural FWPR above national average like Karnataka, Andhra Pradesh, Maharashtra, Telangana, Tamil Nadu, and Gujarat, the shares of women with sole engagement in subsidiary activities range between 2-14%. And, in case of few other states, similarly with rural FWPR above national average like Jharkhand, Madhya Pradesh, Odisha, Uttarakhand, a very high share of rural women workers are engaged only in subsidiary activities, with the shares lying between 36-52%. Thus, the nature of women’s labour market participation is very different between these two sets of states, but it remains uncaptured if one looks at the usual status estimates alone.
In India’s context, because of the empirical realities of a developing nation like high prevalence of informal employment, seasonal activities, the broad employment measures especially underemployment often don’t reveal the various aspects of quality of employment including underemployment. Any attempt to interpret these employment estimates and changes in these estimates should be undertaken with granular level inspection, otherwise it would be inadequate and misleading. This is particularly true for women who are majorly engaged in these ill-paid or unpaid short-term marginal activities where the increase in their participation is more often distress-driven and less in response to generation of good-quality, long-term employment opportunities. It is therefore critical that policymaking takes into account the usual status estimates in conjunction with usual principal status estimates in order to ensure a comprehensive consideration of women’s work.
This blog is written by Bidisha Mondal[1] works as a Senior Research Fellow with IWWAGE,
Aneek Choudhury[2] works as a Research Associate with IWWAGE.
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