Previous Year Question
Which of the following statements is true regarding the trend of unemployment rate in India between July-September, 2019 and July-September, 2022?
It remained the same.
It declined.
Select the correct answer from the codes given below:
2 is true and 1 is false.
Both 1 and 2 are false.
1 is true and 2 is false.
Both 1 and 2 are true.
Correct Answer: A
Detailed Solution
According to the Periodic Labour Force Survey (PLFS), the unemployment rate among persons aged 15 years and above in urban India declined from 8.3% in July–September 2019 to 7.2% in July–September 2022. Thus, a decline of 1.1 percentage points in the unemployment rate was recorded between the two periods.
Statement 1 is incorrect. The unemployment rate did not remain constant between July–September 2019 and July–September 2022. The quarterly data from the Periodic Labour Force Survey recorded a decline in the unemployment rate between the two periods.
Statement 2 is correct. The unemployment rate was 8.3% in July–September 2019, while it declined to 7.2% in July–September 2022. During the same period, the Worker Population Ratio (WPR) increased from 43.4% to 44.5%. These figures relate to the urban population aged 15 years and above.
The Periodic Labour Force Survey (PLFS) was launched by the National Statistical Office (NSO) in April 2017. Its objective is to provide regular data on employment, unemployment, and labour force participation.
Major indicators of PLFS:
Unemployment Rate (UR): The percentage of unemployed persons in the total labour force.
Labour Force Participation Rate (LFPR): The percentage of persons in the total population who are employed, seeking work, or available for work.
Worker Population Ratio (WPR): The percentage of employed persons in the total population.
The PLFS Quarterly Bulletin estimates employment and unemployment indicators in urban areas on the basis of Current Weekly Status (CWS). Under this methodology, a person's employment status is determined based on activities during the seven days preceding the survey.
A decline in the unemployment rate and an increase in the employment ratio are different indicators. The unemployment rate represents the proportion of unemployed persons in the labour force, while WPR represents the proportion of employed persons in the total population. Therefore, both indicators must be considered while assessing labour market conditions.