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Avoiding Rashomon : The Reality of Education, Employment and Earnings in India, 1983-2010. Surjit S Bhalla Workshop on Employment World Bank - ICRIER New York, Sept 27, 2011. Avoiding Rashomon : The Reality of Education, Employment and Earnings in India, 1983-2010. Overview.

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avoiding rashomon the reality of education employment and earnings in india 1983 2010

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit S Bhalla

Workshop on Employment

World Bank - ICRIER

New York,

Sept 27, 2011

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

SurjitBhalla

overview
Overview
  • Work in progress
  • Major focus: Inclusion and growth;
  • Indian experience – lends itself to myriad of explanations – hence, the Rashomon effect
  • Official view: Poverty has been declining at only 1 percentage point year, despite a tripling of per capita GDP growth
  • To accelerate this decline, government needs to provide both direct subsidies (food, diesel, fertilizer) and large scale “digging” ditches employment program.
  • All of these programs were in effect in 1983, and are in effect in equal and greater force today.

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

continued
continued…
  • Alternate view – the above perspective, and policies, are hugely outdated, most likely wrong, and most likely pernicious for the Indian economy
  • Reality – globalization a major force, India benefitted hugely, and is today a transformed place; Poverty less than 10 percent of the population (not 32 percent), middle class close to 50 percent
  • Need different employment and poverty reduction policies

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide5

Problems in Measurements – Sharp Decline in NSS Estimates

Notes: The survey and national accounts estimates are in current rupees per capita per month; the NA estimate is for the base year prevailing at the time of the survey.

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide6

Poverty – Sharp Decline

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide7

Poverty – MDG reached a decade earlier

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide8

Cost of Poverty Removal

  • With perfect targeting only 0.4% of GDP needed for Zero Absolute Poverty (Tendulkar Line)

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide9

Consumption Inequality – Increase in last five years

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide10

Income Inequality

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide11

Real Consumption Growth, by percentiles, 1983-2009/10

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide12

Real Consumption Growth, Difference percentiles, 1983-2009/10

Notes: Each percentile represents the difference in growth rates of the poor and rich percentile e.g. the first percentile represents the difference in growth of the 1st and 100th percentile; second the difference in growth of the 2nd and 99th etc.

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide13

Real Wage Income Per Person Growth, by percentiles, 1983-2009/10

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide14

Real Wage Income Per Person Growth, Difference percentiles, 1983-2009/10

Notes: Each percentile represents the difference in growth rates of the poor and rich percentile e.g. the first percentile represents the difference in growth of the 1st and 100th percentile; second the difference in growth of the 2nd and 99th etc.

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide15

Sharp Decline in Education Inequality

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide16

Education – Girl Catch-up

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide17

Education – the Poor Catch-up

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide18

Evolution of Middle Class in India, 1980 – 2010

Notes: Middle Class line defined to be the poverty line in developed economies - PPP $8.2 per capita per day 1996 prices or PPP$ 4000 in 2010 prices. In 2010 rupees, the middle class line for India is Rs. 3840 per capita per month or for a family of four, Rs. 1.8 lakhs a year. On a per capita per day basis, the Tendulkar poverty line in 2010 would be approximately Rs. 25; the middle class line, Rs. 121

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide19

Employment Trends 2004/5-2009/10

  • LFPR for age group 15-59 declined from 62.1% to 56.6%
  • However if we take school/college going into account, LFPR(adj) decline from 71.2% to 68.9%
  • Thus some decline can be explained by movement from labor force into education
  • Most of the decline in LFPR is contributed by females in age 25-59 (43.6% to 34.4%), especially rural females (50.7% to 39.9%)
  • Sharp decline in rural women of age 25-59 self-employed in agriculture (27.2% to 18%)
  • The poor show a larger decline, but result preliminary

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Labor Force Participation Rates in India, 1983-2010

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Adjusted for Education: Labor Force Participation Rates

*Adjusted labor force includes persons reporting to attend educational institution

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide22

Labor Force Participation Rate by Consumption Levels

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Labor Force Participation Rates (25-59 years)

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Real Wage

*Wage was deflated using rural price index of 2004/05 as deflator

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide25

Wage Income Vs Consumption

*Wage was deflated using rural price index of 2004/05 as deflator

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

Sept 2011

slide26

Wage Income Vs Consumption

*Wage was deflated using rural price index of 2004/05 as deflator

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

Sept 2011

slide27

Workdays: Casual Vs Total

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Labor Force Participation Rate

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

slide29

Adjusted Labor Force Participation Rate

*Adjusted labor force includes persons reporting to attend educational institution

Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla

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Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010

Surjit Bhalla