I am delighted to be here for an in-person meeting after a long gap of two years during the Covid pandemic. It is heartening to see that the elegant auditorium of GIFT is now being used again for generating meaningful debates on the economy and employment in Kerala and the whole of India. My brief is to go through the Kerala Economic Review of 2022 and highlight some observations concerning employment. To this end, I will make minimal use of some empirical data from the Economic Review and discuss some related sources. Hopefully I can bring to your attention a few takeaways on the employment situation in Kerala.

Here, a brief review of the taxonomy of labour force, which we come across in the literature is in order. First, there are the status groups such as the self-employed and own account workers, and wage employees (comprising of the regularly paid, casual wage workers and those paid in kind). Among the regularly paid workers we draw a distinction between the formally employed with better terms and conditions of employment including assured wages, tenure, and social security benefits and the informally employed often without access to such improved benefits. Thereon the workers are divided into industrial divisions such as: primary sector (comprising of agriculture and fisheries), secondary sector (construction and manufacturing) and tertiary sector of numerous service industries both in the public and private domains. We also take on board an occupation-based classification of workers into numerous skill categories of white- and blue-collar workers. The above threefold divisions of workers are further disaggregated in terms of gender categories and rural urban locations.¹

The literature on economic growth makes it abundantly clear that growth and development in any country or region involve a structural transformation in the size and composition of the labour force. The most important change is a transition from self-employment in the precincts of the household to paid employment, and from work mostly in the primary sector to secondary and tertiary sectors of industry consisting of construction, manufacturing, and services industries, and occupation wise from lesser skilled categories of different industrial divisions towards more skill intensive and productive professions. In general, such changes are accompanied by a shift of the population from rural to urban areas and a significant increase in the number and relative share of women workers. ²  How are these transformative changes manifested in Kerala? For a comparative assessment of the employment situation, we review some data for Kerala and the whole of India available from the Economic Review of the State Planning Board (SPB 2022).

The Economic Review draws attention to the low labour force participation rates prevalent in the state. Ordinarily we take the averages for every category of the labour force disaggregated by age groups, gender divisions, and rural-urban locations. It is important to note that the National Statistical Organization (NSO) of India measures the participation rates through sample surveys at the household level using two distinct concepts of measurement: the usual status and the weekly status in employment. With the usual status approach, survey authorities ask the households, whether during the past one year any member of the household has taken part in paid or remunerative work, and if so, they are considered as part of the labour force. The NSO also tries to find out if during the greater part of the year, did they work for remuneration in which case, they are listed as the employed and if not, as the unemployed. With the weekly status approach the same procedure is followed: for each person, whether he/she has worked or not during the preceding week is recorded. The weekly status approach is a more practical way of recalling one's employment experience because of the shorter reference period. The NSO derives the quarterly estimates of labour force using the weekly status-based data generated from four sub-rounds of the sample survey every year.

Table 1 which gives the average estimates of labour force participation in Kerala and India by age-groups and gender categories and rural-urban locations point to the following observations. At an aggregate level for all the age groups put together, the worker participation rates in rural areas are better than urban in areas. The participation of men in remunerative work is nearly twice that of women both rural and urban areas. Indeed, the average work participation of women in India is exceedingly low in comparison to many other countries. Women are not visible in the labour force which we often find it difficult to explain. Many of us are inclined to attribute it to culture, without considering the underlying economic factors. The problem as such calls for a serious reflection by the scholarly community.

When we examine the same data by gender and age groups, the participation rates of men in the group of 15 years and above and those in the prime age group of 15 to 59 years, both rural and urban areas, are on par with what you see in the rest of the world. There is absolutely nothing different about men's participation rates, whereas the rates for women are exceedingly low in comparison to what you see in other countries. Here we are still merrily bonded to explaining every difference in terms of culture. Let me also point out that the urban work participation rates are not strikingly different from those in rural areas; but they are lower. Its implication is that the very process of urbanization materializing right before us, which we all believe can bring about greater employment, has so far failed to raise the work participation rates. That is an important takeaway from the figures we have in Table 1.

A second point is that the averages are likely to mislead and therefore, ideally, we should stick to gender-specific work participation rates as given in Table 1. Here we notice that Kerala as the rest of India, has a problem in raising the work participation rate of women. There is yet another problem we notice from Table 2 that during the pandemic years there has been a consistent decline in the quarterly estimates of work participation of men. These estimates have been derived using the current weekly status approach, but they are not significantly different from the figures based on usual status approach as in Table 1. Therefore, employment recovery ought to become our main concern during the post-pandemic years. To this end we need to focus attention on the ways and means of increasing the work participation rates of men and women.

In the post-pandemic era when we talk about increasing the employment of women, our focus should be on paid employment. An urbanization process is underway in Kerala, but the difference in participation rates between rural and urban areas is not very large in the state. In passing, it may also be noted that Kerala is a rural-urban continuum in which rules of patriarchy and age-old institutions governing women's work are widely prevalent. Whether or not urbanization increases in the state, the focus ought to be on bringing more women into the skill-intensive categories of paid employment. Fortunately, the state is poised to make some strides in this direction. There is a very comprehensive account of the plan being formulated in Kerala to increase the presence of women in the knowledge-intensive sectors (SPB 2022, Isaac 2022). My submission in this connection is that the focus should be as much on raising the participation of women in the middle and lesser skilled categories of work. It is a matter of adopting a realistic approach towards employment planning in the state.

What kind of employment do we have in mind? We all have a preferred dreamland where we want to be part of a formally employed workforce with assured tenures, regular incomes, and access to benefits from work in particular, health care for workers and their dependents during and beyond the period of one's active work participation. Currently, the formal sector holds less than ten percent of the total labour force in India, and it is no better in Kerala. More than ninety percent of the workforce remains outside the formal sector. This is exactly the domain which the State Planning Board has categorized as the organized sector of Kerala. For the time being, let us not worry about the semantics of classifying employment into the formal, informal, organized, and unorganized sectors. Table 3 in the text of this paper, reproduced from the Economic Review shows the numbers in the organized sector who are employed in the public and private sectors of the economy. They are the principal beneficiaries of a much acclaimed "post-war construct" of employment giving improved terms and conditions of work with open-ended contracts. Quite unfortunately this model is increasingly becoming dysfunctional.