Measurement of Unemployment
Unemployment rate is the percent of the labor force that is without work. It is calculated as below:
Unemployment rate = (Unemployed Workers/Total labour force) × 100
Measurement of unemployment is a difficult task. In India, the most comprehensive and reliable data on employment and unemployment are compiled by the National Sample Survey Organization (NSSO). Based on different reference period (a year, a week, and each day of a week), NSSO provides four different measures of employment and unemployment. The following are some methods of measuring unemployment:
1) Usual Principal Status Unemployment (UPS): This is measured as the number of persons who remained unemployed for a major part of the year. The persons covered by the survey may be classified into those working and/ or available for work in their principal activity, and those working and/or available for work in a subsidiary activity, that is, a sector other than their principal activity. Hence, within the usual status concept, the estimates are now derived on the usual principal status as well as the usual principal and subsidiary status basis. The usual status unemployment rate is a person rate and indicates chronic unemployment, because all those who are found usually unemployed in the reference year are counted as unemployed. This measure is more appropriate to those in search of regular employment, e.g., educated and skilled persons who may not accept casual work. This is also referred to as ‘open unemployment’.
2) Usual Principal and Subsidiary Status Unemployment (UPSS): Here person is considered unemployed, if besides UPS, those available but unable to find work on a subsidiary basis during a year.
3) Current Weekly Status Unemployment (CWS): This refers to the number of persons who did not find even an hour of work during the survey week.
4) Current Daily Status Unemployment (CDS): This refers to the number of persons who did not find work on a day, or on some days, during the survey week.
Rates of unemployment differ based on different concepts. The UPS and UPSS measure reflect only long term unemployment spells. The CWS measure captures shorter unemployment spells, but ignores unemployment for less than a week. The CDS measure is the most inclusive, capturing both open as well as partial unemployment. The unemployment rate based on different measures is given under the following
It is clear from the above table that there is decline in the unemployment rate since 2004-05. UPSS has remained more or less same between 2004-05 to 2010-11 at marginally above 2 per cent. CWS declined from 4.4 per cent in 2004-05 to 3.6 in 2009-10 and almost remained same at 3.7 in 2010-11. CDS decreased continuously from 8.2 per cent in 2004-05 to 6.6 per cent in 2009-10 and 5.6 per cent in 2010-11.
