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Understanding Education, Employment, and Earnings in India (1983-2010): A Critical Analysis

This workshop by Surjit S. Bhalla explores the complex realities surrounding education, employment, and earnings in India over the period from 1983 to 2010. Highlighting contrasting perspectives, it delves into the declining poverty rates, the impact of globalization, and the evolution of the middle class, supported by statistical analysis. The discussion emphasizes the need for updated policies to address income inequality and improve employment opportunities, reflecting on both official statistics and grassroots realities. This comprehensive overview aims to reshape our understanding of socio-economic dynamics in India.

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Understanding Education, Employment, and Earnings in India (1983-2010): A Critical Analysis

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  1. 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

  2. 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

  3. continued… • Alternate view – the above perspective, and policies, are hugely outdated, most likely wrong, and most likely pernicious for the Indian economy • Reality – globalization a major force, India benefitted hugely, and is today a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

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

  5. 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

  6. Poverty – Sharp Decline Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  7. Poverty – MDG reached a decade earlier Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  8. 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

  9. Consumption Inequality – Increase in last five years Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  10. Income Inequality Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  11. Real Consumption Growth, by percentiles, 1983-2009/10 Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  12. 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

  13. 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

  14. 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

  15. Sharp Decline in Education Inequality Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  16. Education – Girl Catch-up Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  17. Education – the Poor Catch-up Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  18. 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

  19. 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

  20. Labor Force Participation Rates in India, 1983-2010 Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  21. 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

  22. Labor Force Participation Rate by Consumption Levels Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  23. Labor Force Participation Rates (25-59 years) Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  24. 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

  25. 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

  26. 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

  27. Workdays: Casual Vs Total Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  28. Labor Force Participation Rate Avoiding Rashomon: The Reality of Education, Employment and Earnings in India, 1983-2010 Surjit Bhalla

  29. 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

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

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