Knowledge Nugget: What are key highlights of Periodic Labour Force Survey (PLFS) and why is it UPSC essential

Why in the news?

Given the growing demand for more frequent data about the labour market and enhancing the scope, relevance, and coverage of the surveys, the Ministry of Statistics and Programme Implementation (MoSPI) has come up with the first monthly bulletin of the Periodic Labour Force Survey (PLFS).

Key Takeaways:

1. The National Sample Survey Office (NSSO) under MoSPI had launched PLFS in April 2017. Quarterly bulletins provide details of labour force indicators such as Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR), and Unemployment Rate (UR). In 2019, NSSO was merged with the Central Statistical Office (CSO) to form the NSO.

2. Earlier, the MoSPI released rural PLFS data on an annual basis and urban PLFS data on a quarterly basis, along with an annual report that combines data for both urban and rural on an annual basis.

3. The first monthly estimates, published by the National Statistical Office (NSO), are based on the current weekly status (CWS) approach, which measures the activity status of persons surveyed based on the reference period of the last seven days preceding the date of survey.

4. Basically, PLFS collects data in two ways — Usual Status (US) and Current Weekly Status (CWS). Broadly speaking, within the usual status, the survey respondent has to recall their employment details from the last one year, while in the CWS, the respondent has to recall the details over the past one week.

5. According to the CWS approach, the estimate of the labour force is derived by considering those who worked for at least 1 hour or was seeking/ available for work for at least 1 hour on any day during the 7 days preceding the date of survey.

Key findings from the report:

1. India’s unemployment rate stood at 5.1 per cent in April for persons aged 15 years and above, with the rate for males at 5.2 per cent and for females at 5.0 per cent. In urban areas, the unemployment rate stood at 6.5 per cent, while in rural areas, the unemployment rate for persons aged 15 years and above was recorded to be 4.5 per cent.

2. Females saw a higher unemployment rate at 8.7 per cent than 5.8 per cent for males in urban areas. In rural areas, however, the unemployment rate for females was lower at 3.9 per cent than 4.9 per cent for males in April.

3. The Labour Force Participation Rate for persons aged 15 years and above in the country stood at 55.6 per cent in April, with the rate for urban areas at 50.7 per cent and for rural areas at 58.0 per cent. The gender-wise split showed the low labour force participation rate of females at 34.2 per cent as against 77.7 per cent for males.

4. The female LFPR was lower for urban areas at 25.7 per cent than 38.2 per cent in rural areas for the age group 15 years and above. In comparison, the male LFPR stood at 75.3 per cent in urban areas and 79.0 per cent in rural areas.

5. The Worker Population Ratio (WPR), which indicates the employment rate, was recorded at 52.8 per cent for persons of age 15 years and above in April. The WPR for persons aged 15 years and above stood at 47.4 per cent in urban areas and 55.4 per cent in rural areas.

6. As per the gender-wise breakup, WPR for females was 23.5 per cent in urban areas and 36.8 per cent in rural areas. For males, the WPR stood at 71 per cent in urban areas and 75.1 per cent in rural areas.

(Note: These data are not for you to memorize it but to create a broader understanding. For example, the difference between the unemployment rate in rural and urban areas indicates the job creation pressures in the urban areas. The higher unemployment for females in urban areas could be due to (a) higher female preferences for education in urban areas than rural areas and (b) lower employment opportunities in urban areas than rural areas for females.)

BEYOND THE NUGGET: Understand the key terms

1. Employed: According to MoSPI, following the usual status approach (with a reference period of 365 days) adopted by NSSO a person in the labour force is considered as working or employed if he/she is engaged relatively for a longer time, during the reference period of last 365 days in any one or more of the work activities.

2. Unemployment Rate (UR): Unemployment refers to the condition where individuals capable of working are actively seeking employment but are unable to secure suitable jobs. An unemployed person, then, is someone who is part of the labor force, possesses the requisite skills, but currently lacks gainful employment.

The unemployment in the country is commonly calculated using the formula:

Unemployment rate = [Number of Unemployed Workers / Total Labour Force] x 100.

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Here, the ‘total labour force’ includes the employed and the unemployed. Those who are neither employed nor unemployed — students, for example— are not considered a part of the labour force.

3. Labour Force Participation Rate (LFPR): Labour force participation rate refers to the part of the population that supplies or offers to supply labour for pursuing economic activities for the production of goods and services and therefore, includes both ‘employed’ and ‘unemployed’ persons. Under the CWS approach, labour force refers to the number of persons either employed or unemployed on an average in a week before the date of the survey. LFPR is defined as the number of persons/ person-days in the labour force per 1000 persons /person-days.

4. Worker Population Rate (WPR): Under the CWS, the WPR refers to the number of persons who worked for at least one hour on any day during the days preceding the date of the survey. According to MoSPI, it is defined as the number of persons/person-days employed per 1000 persons/person-days.

5. Work Force: According to MoSPI, “Persons engaged in any gainful activity are considered ‘workers’ (or employed). They are the persons assigned any one or more of the nine activity categories under the first broad activity category i.e. “working or employed”.”

Post read question

Consider the following statements about the PLFS:

1. The NSO has published the first monthly PLFS following the Usual Status (US) approach.

2. The MoSPI had launched the first PLFS in April 2017.

3. Under the CWS, the WPR refers to the number of persons who worked for at least one hour on any day during the days preceding the date of survey.

Which of the following statements is/are correct?

(a) 1 and 3 only

(b) 2 and 3 only

(c) 1 and 2 only

(d) 1, 2 and 3

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