Employment and Unemployment Patterns in Uttarakhand
Employment and Unemployment Patterns in Uttarakhand
Employment and Unemployment Patterns in Uttarakhand
Employment and Unemployment Patterns in Uttarakhand : Uttarakhand, located in the Himalayan region, is largely a hilly state with around 65% of its geographical area under hills. This terrain poses several challenges for economic development and livelihood opportunities. The state has low levels of urbanization and industrialization. Agriculture and allied activities are the mainstay of the economy, engaging over 60% of the workforce. However, the hilly terrain limits cultivation and agricultural productivity.
The state has witnessed high rates of out-migration, especially from the hills, due to lack of livelihood opportunities. Providing productive employment to the growing workforce remains a key policy challenge. This article comprehensively analyses the employment situation and patterns in Uttarakhand across various parameters:
Key Highlights of Employment and Unemployment Patterns in Uttarakhand
- Declining labor force participation: Labor force participation rate declined from 53.7% in 2004-05 to 49.5% in 2011-12 but increased marginally to 51.2% in 2017. This indicates inability of economy to productively engage the workforce.
- Increasing unemployment: Unemployment rate increased from 4.2% in 2004-05 to 5.8% in 2011-12 and further to 9.2% in 2017, highest amongst Himalayan states.
- High youth unemployment: At 13.2%, youth (15-29 years) unemployment rate is more than twice the adult rate. It is higher in urban areas and plains.
- Gender gap: Labor force participation and worker population ratio is significantly lower for women compared to men, indicating their low engagement in the economy.
- Predominance of self-employment: Over half the workers are self-employed, more so in the hills and rural areas with limited wage employment avenues.
- Casualization of workforce increased with 18.9% as casual labor in 2017, up from 11.3% in 2004-05.
- Structural change: Share of farm sector employment declined from 66.1% in 2004-05 to 39.3% in 2017, with increase in construction and services jobs.
- Skills mismatch: Majority of workforce engaged in medium skills jobs, mainly farm activities, despite increase in more educated workforce. Re-skilling is necessary.
The analysis clearly highlights the need for urgent policy interventions to address the employment situation in the state.
Labor Force Participation
Employment and Unemployment Patterns in Uttarakhand : The labor force participation rate (LFPR) is an important indicator of the ability of an economy to productively utilize its working age population. Uttarakhand has witnessed a decline in the LFPR over the years indicative of the inability of its economy to gainfully engage its workforce.
Key Trends
- As per NSSO data, the LFPR declined from 53.7% in 2004-05 to 49.5% in 2011-12, indicating falling engagement of the working age population in economic activities.
- However, as per the HDR 2017 survey data, the LFPR increased marginally to 51.2% in 2017.
- The LFPR was significantly higher for men at 56.2% compared to a low 23.8% for women in 2017, indicating far lower engagement of women in the labor market.
- Rural areas had higher LFPR at 52.5% compared to 44.4% in urban areas in 2017. Plains had a higher 54.1% LFPR than hills at 47.3%.
Table 1: Uttarakhand – Key Labor Market Indicators
| Indicator | 2004-05 | 2011-12 | 2017 |
|---|---|---|---|
| Labor Force Participation Rate | 53.7% | 49.5% | 51.2% |
| Worker Population Ratio | 50.3% | 46.7% | 46.5% |
| Unemployment Rate | 4.2% | 5.8% | 9.2% |
Source: NSSO and HDR Survey
The marginal increase in LFPR in 2017 compared to 2011-12 indicates some improvement in engagement of working age population in economic activities. However, the LFPR is still lower than the 2004-05 level highlighting the long term trend of falling labor force participation in the state.
Within the working age category, the LFPR is understandably the lowest for the age group 15-29 years as many are studying. However, the LFPR for this youth age group is down from 41.6% in 2011-12 to 37.8% in 2017 as per HDR survey data, indicating declining labor market entry of the educated youth.
Key Challenge
The declining labor force participation, especially among women, is a key area of concern for the state. It indicates inability of the economy to productively engage its working age population. This calls for urgent steps to create adequate employment opportunities to productively harness the labor force and address the sustainability of livelihoods.
Worker Population Ratio
Employment and Unemployment Patterns in Uttarakhand : The worker population ratio (WPR) is the proportion of total population that is engaged in economic activities or works. As per NSSO data, the WPR in Uttarakhand witnessed a steep decline from 50.3% in 2004-05 to 46.7% in 2011-12, indicating falling engagement of the population in economic activities over this period.
However, as per latest HDR 2017 survey data, the WPR remained stagnant at 46.5% in 2017, with negligible change since 2011-12.
Key Trends
- The WPR was significantly higher for men at 56.5% compared to a low 23.2% for women in 2017. This indicates far lower work participation of women in economic activities compared to men.
- Rural WPR was 47.6% compared to 41% in urban areas in 2017. Plains had a higher 50% WPR than hills at 41.4%, indicating lower engagement of hilly population in economic activities.
The stagnant WPR combined with the marginal increase in LFPR between 2011-12 and 2017 indicates that the additional entrants into the labor force were largely unable to find employment and remained unemployed.
Key Challenge
The low and falling WPR, especially among women, indicates inability of the economy to provide adequate work opportunities and livelihoods. It highlights the critical challenge of creating productive employment and self-employment opportunities in the state to gainfully engage its workforce.
Unemployment Scenario
Despite being a small state, Uttarakhand has witnessed rising unemployment levels over the years even while its economy registered relatively high GDP growth rates.
Key Trends
- The unemployment rate increased from 4.2% in 2004-05 to 5.8% in 2011-12 and further sharply to 9.2% in 2017.
- In 2017, unemployment rate was significantly higher in urban areas at 13.2% compared to rural areas at 7.8%.
- It was also higher in the plains at 10.4% compared to hills at 7.4% in 2017.
- Among the Himalayan states, Uttarakhand had the highest unemployment rate in 2017-18 as per Periodic Labor Force Survey data.
Table 2: Unemployment Rate – Spatial Pattern
| Area | 2004-05 | 2011-12 | 2017 |
|---|---|---|---|
| Uttarakhand | 4.2 | 5.8 | 9.2 |
| Rural | 2.8 | 4.2 | 7.8 |
| Urban | 9.1 | 12 | 13.2 |
| Hills | NA | NA | 7.4 |
| Plains | NA | NA | 10.4 |
Source: NSSO and HDR Survey
The rising unemployment rate is a worrying sign of the inability of the economy to create adequate job opportunities for the rapidly growing labor force in the state.
A key dimension is the high unemployment amongst the educated youth which stood at 17.4% for those with secondary and higher education in 2017, compared to 33.3% for illiterates. This indicates the inability of economy to gainfully employ the better educated youth.
Key Challenge
The rising unemployment, especially among the educated youth is a serious policy concern for the state. It highlights the huge gap between rapid increase in educated workforce and availability of productive job opportunities leading to under utilization of human capital.
Youth Unemployment
Youths in the age group of 15-29 years constitute the upcoming generation of workers. Ensuring adequate employment opportunities for them is vital for utilization of the demographic dividend. However, youth unemployment is a serious challenge facing Uttarakhand.
Key Trends
- The youth unemployment rate increased from 6% in 2004-05 to 10.2% in 2011-12 and further to 13.2% in 2017 as per HDR survey data.
- In 2017, youth unemployment was significantly higher in urban areas at 17.4% compared to 10.8% in rural areas.
- It was higher among youth in the plains at 14.9% versus 11.1% in the hills.
- The educated youth unemployment rate was 17.4% in 2017, higher than the uneducated, underlining the mismatch.
Table 3: Youth (15-29 years) Unemployment Rate
| Year | Youth Unemployment Rate | Educated Youth Unemployment Rate |
|---|---|---|
| 2004-05 | 6.0% | 9.8% |
| 2011-12 | 10.2% | 17.2% |
| 2017 | 13.2% | 17.4% |
Source: NSSO and HDR Survey
The high and rising youth unemployment indicates inability of economy to provide productive work opportunities to the rapidly increasing young workforce in the state.
Key Challenge
Youths constitute nearly 30% of the state’s population. Ensuring gainful employment opportunities for them is vital to reap the demographic dividend and for inter-generational social mobility. The high youth unemployment calls for urgent policy steps and targeted interventions to boost job creation and enable skill development for unemployed youth.
Gender Gap in Employment
Gender inequality in employment outcomes persists as a key issue in Uttarakhand. On all major labor force and employment indicators, women are lagging behind men indicating their far lower engagement in the economy.
Key Trends
- The labor force participation rate was less than half for women at 23.8% compared to 56.2% for men in 2017.
- Similarly, worker population ratio was 23.2% for women against 56.5% for men, less than half.
- In 2017, unemployment rate amongst women was 11.1% compared to 8.4% among men.
- 73.3% women workers were self-employed compared to 46.9% men. Women had lower regular salaried jobs at 16.7% against 28.8% men.
- Casual labor was also lower for women workers at 9.9% compared to 24.3% among male workers.
This indicates the highly vulnerable nature of employment for women characterized by low participation itself and predominance in informal, subsistence level activities mostly as marginal workers.
Key Challenge
The significant gender gap in employment outcomes underlines women’s lower engagement with the economy itself, the poorer quality of employment among those working, and discrimination in the labor market. Steps are needed to improve women’s participation, enhance skill development, facilitate access to finance for self-employment ventures, address wage discrimination, and enable gender sensitive labor regulation.
Predominance of Self-Employment
Self-employment as a percentage distribution of usually employed was predominant at 75% in 2004-05 highlighting the informal nature of the economy and livelihoods pattern in Uttarakhand.
Key Trends
- Self-employed base reduced from 75% in 2004-05 to 69% in 2011-12 but still the majority were self-employed.
- As per HDR 2017 survey data, 56.9% workforce remained self-employed. So over half the workers are self-employed.
- 73.3% women workers were self-employed compared to 46.9% men. Indicating highly vulnerable nature of women’s livelihoods.
- Self-employment was 60.6% in rural areas compared to 38.7% in urban areas in 2017.
- In hills, 60.8% were self-employed versus plains at 55%. Showing more limited regular job opportunities in hills.
Table 4: Changes in Employment Status
| Employment Status | 2004-05 | 2011-12 | 2017 |
|---|---|---|---|
| Self-Employed | 75% | 69% | 56.9% |
| Regular Worker | 11.3% | 13.4% | 18.9% |
| Casual Worker | 13.7% | 17.6% | 24.2% |
Source: NSSO and HDR Survey
While self-employment percentage has declined, small farmers, marginal workers, and micro enterprises still characterize the informal sector led economy.
Key Challenge
While self-employment provides a survival strategy for many, sustenance remains a key challenge. Enhancing productivity, market access, access to credit/assets, and skills upgradation are vital to improving viability of self-employment enterprises for vulnerable sections like small & marginal farmers and micro-entrepreneurs.
Casualization of Workforce
Alongside decline in self-employment, Uttarakhand has also witnessed casualization of workforce over the years as regular salaried job opportunities remained limited.
Key Trends
- Share of casual labor increased from 11.3% in 2004-05 to 13.4% in 2011-12 and further to 18.9% in 2017.
- 24.3% of male workers were engaged as casual labor compared to only 9.9% women workers.
- 26.6% workers in the plains were casual labor compared to 14.7% in hills in 2017.
Increase in casual wage work indicates the limited opportunities for stable regular salaried jobs even as new entrants join the workforce. Casual work is characterized by uncertainty, irregularity and informality affecting incomes.
Key Challenge
The trend towards casualization calls for efforts to boost availability of formal jobs in secondary and tertiary sectors. It also warrants steps towards minimum wages implementation, social security and other labor welfare measures to protect this vulnerable segment of casual/contract workers.
Structural Transformation
An important feature of economic development in Uttarakhand is the gradual shift in employment away from farm-based activities towards construction and services over the years. However, the manufacturing sector has lagged behind in generating employment.
Key Trends
- Share of primary sector in employment dropped from 66.1% in 2004-05 to 49% in 2011-12 and further to 39.3% in 2017.
- Secondary sector share increased from 12.3% in 2004-05 to 22.1% in 2011-12 and further to 25.4% in 2017, largely due to construction activities.
- Share of tertiary sector went up from 21.6% to 28.9% and further to 35.3% over above period, led by public services and trade/hotels sectors.
Table 5: Changes in Sectoral Employment Share
| Sector | 2004-05 | 2011-12 | 2017 |
|---|---|---|---|
| Primary | 66.1% | 49% | 39.3% |
| Secondary | 12.3% | 22.1% | 25.4% |
| Tertiary | 21.6% | 28.9% | 35.3% |
Source: NSSO and HDR Survey
The structural change is bringing diversification in employment with increasing engagement in construction and services jobs. However, agriculture still engages 2 out of 5 workers indicating the continued reliance on farm livelihoods.
Key Challenge
There is need for focused efforts to accelerate growth of labor intensive manufacturing to further diversify employment while leveraging construction boom through housing and infrastructure development in the state. Proactive skill development is vital to enable workforce transition across sectors.
Occupational Structure
The changing employment structure across the primary, secondary and tertiary sectors is bringing significant changes in occupational pattern of the workforce in Uttarakhand. But adjustment issues remain.
Key Trends
- Share of workforce engaged in agricultural activities reduced from around 55% to 28.2% between 2011-12 and 2017.
- About 20% workers moved into services sector jobs like retail, hospitality in 2017.
- Around 15% workers shifted towards construction jobs.
- However, middle skills jobs still dominate with 65.5% workforce in 2017. Of this, 28.2% workers did farm jobs, 20.2% services jobs, and 8.1% engaged in crafts and trades.
- Women concentrated in farm activities (57.8%) while men spread across elementary (29.2%) and services occupations.
Table 6: Occupational Distribution of Workers (2017)
| Occupation Skill Level | Percentage Share | Key Occupations |
|---|---|---|
| High Skilled | 9.6% | Professional and Technical Jobs |
| Medium Skilled | 65.5% | Agriculture, Services, Crafts & Trades |
| Low Skilled | 24.9% | Wage Labor in Farms/Non-Farms |
Source: HDR Survey
The analysis shows that while agricultural occupations are declining with structural change, majority workforce still engaged in medium skills farm and non-farm jobs based on existing skill sets.
Key Challenge
For smooth occupational transition and reduced friction in structural transformation process, significant upskilling and reskilling efforts are needed to prepare workers for emerging jobs like construction, hospitality, retail etc. Apprenticeships and vocational training can facilitate better skills matching.
Income Levels Analysis
An important dimension of assessing employment scenario is by analyzing the income levels and distribution across different categories of workers. This indicates the quality and productivity differences across types of employment.
Key Trends
- In 2017, the median monthly income for regular salaried employees was Rs. 10,000 compared to just Rs. 5500 for casual wage workers in Uttarakhand.
- Self-employed workers had median earnings of Rs. 8000 per month. Indicating disadvantage for casual wage workers.
- Across education levels, post-graduates and technical degree holders had higher median
Higher Unemployment Among Educated Youth
- Unemployment rate is higher among educated youth (above secondary level) at 17.4% compared to 13.2% for overall youth in 2017.
- For educated male youth, unemployment rate was 19.9% while for educated female youth it was lower at 12.3% in 2017.
- In plains districts, unemployment was higher among educated male youth (18.7%) than educated female youth (6.8%).
- In hill districts, educated female youth faced higher unemployment (24.8%) than educated male youth (20.7%).
Spatial Variations
- Male youth unemployment was higher in plains (14.5%) and urban areas (17.6%).
- Female youth unemployment was significantly higher in hills (15.8%) and rural areas (11.1%) compared to plains and urban areas.
- The gender gap in youth unemployment was wider in hills (11 percentage points) and rural areas (7 percentage points).
Alarming Situation
- The high and rising unemployment among the youth, especially the educated youth, presents a major policy challenge for the state.
- It indicates the inability of economy to productively absorb the rapidly increasing educated young workforce into the job market.
- Targeted policy interventions are vital to boost employment opportunities for the youth through skill development programs, apprenticeships, supporting startups and small enterprises etc.
Employment and Unemployment Patterns in Uttarakhand, the analysis highlights the urgent need to address the severe crisis of high educated youth unemployment to prevent under-utilization of precious human capital resources.
FAQs on Employment and Unemployment Patterns in Uttarakhand
What is the unemployment rate in Uttarakhand?
The unemployment rate increased from 4.2% in 2004-05 to 9.2% in 2017, highest among Himalayan states.
What is the key employment challenge in Uttarakhand?
Declining labor participation and rising unemployment indicates inability of economy to productively engage the rapidly growing workforce.
Which sectors dominate employment in Uttarakhand?
Primary sector engages 39% workforce, secondary sector 25% (mainly construction) and tertiary sector 35% (2017 data).
What is the level of youth unemployment in the state?
At 13.2%, youth (15-29 years) unemployment rate is more than twice the adult rate. It is higher among educated youth.
What is the extent of gender gap in employment outcomes?
Significant gap exists with women’s labor force participation rate less than half of men’s rate indicating their lower engagement.
