WHEN the first results of the 55^th Round of the National Sample Survey were released, it was already apparent that there had been some major shifts in patterns of employment, especially in the rural areas. The 55^th Round indicated a substantial decline in the share of agriculture and a rise in the share of non-agriculture in employment. In itself this could be a positive sign of progress and diversification, but it was associated with a fairly large drop in work participation rates of both men and women, which indicated a deceleration in aggregate employment growth.

Such a deceleration has now been confirmed by the 2001 Census. When the estimated population is used to estimate the total number of those in some form of employment in 1999-2000, it yields results which show an even sharper drop in the rate of growth of rural employment generation than was previously supposed. This is shown in Table 1, which show the annual rates of employment growth based on NSS and Census data combined, from 1983 onwards.

So the average annual rate of growth of aggregate rural employment growth was only 0.58 per cent over the period between 1993-94 and 1999-2000. This is not only much lower than the previous period’s rate, but also the lowest such rate of increase observed since the NSS first began recording employment data in the 1950s.

However, despite what appears to be a very disturbing picture in terms of rural employment growth, there are those who have argued that the 55^th Round data actually reflects many positive features and that the slowdown in employment growth is not really cause for concern. This argument is based on two points : the rise in the number of those in education, and the increase in non-agricultural employment.

Thus, it is argued that the fall in work participation for both males and females actually reflects a large increase in the number of those who would earlier have been in the work force and are now in full time education, especially in the age group 15 to 19 years. The increase in education is in any case a very welcome sign, and if it explained all of the decline in work force participation, then it would clearly be even more cause for celebration.

Similarly, non-agricultural work has increased not only relative to those in employment, but also as a proportion of population compared to the last large sample of the NSS in 1993-94. There has been an argument that such an increase generally reflects a process of diversification of employment which is a necessary and desirable feature of development, rather than a distress sign of inadequate employment generation within agriculture. There are others who have seen it as the result of public expenditure patterns which generate non-agricultural employment in particular periods.

What it means may be illuminated by examining the pattern of employment. For men in rural areas, there has been long term tendency for a gradual decline in self-employment and an increase in casual work, which grew especially marked over the late 1990s. But self employment still dominates in the aggregate, accounting for around 55 per cent of total employment. Regular employment appears to have stabilised at a rather low proportion of the rural male workforce of around 7-8 per cent, after falling from around 9-10 per cent in the mid 1980s.

For rural women, the type of employment seems to fluctuate much more substantially, with no clear trend over the period since 1983. In the 1990s, there has been some increase in self-employment. This reflects both the greater recognition of women’s work within the household and the decline in casual work available.

The 55^th Round does show a fairly sharp drop in employment of men in the primary sector, but this is in marked contrast to all the previous Rounds of the 1990s. Also, even this is still around the levels observed in 1990 in the 46^th Round. So, at first glance the data suggest that for rural male workers diversification away from primary employment had occurred, albeit slowly, in the period until 1990. This process had been halted and even reversed over the 1990s, and the apparent increase in 1999-2000 would indicate only a recovery to the levels of one decade earlier.

For rural women workers, the tertiary sector has always dominated in employment, and the data indicate a marked process of increase in employment in this sector over the 1990s. However, primary sector employment, if anything, seems to have increased over the 1990s, and especially in the 55^th Round.

For both men and women, the 55^th Round indicates a substantial overall decline in work participation rates (that is, the proportion of people who are actually working). This should be explained by either education or unemployment, or a combination of the two. But while the proportion of males and females in education has indeed increased, this increase is not as substantial as the fall in aggregate employment rates would lead us to expect. In fact the 55^th Round shows very little difference from the earlier Rounds in this respect, merely conforming to the generally upward trend but with no sharp additional increase.

It is also worth noting that for both males and females, the current weekly status shows a lower degree of participation in education than the usual status definitions, indicating that even when there may be formal registration in education, actual attendance is probably less.

What about trends in unemployment ? The "usual status" definitions actually suggest that unemployment rates fell slightly in the 5^th Round compared to the immediately preceding Round, although they remain higher than for the previous large sample survey in 1993-94. For women the unemployment rate even by usual status increased over previous rounds.

But there is a strong divergence between "usual status" and "current weekly status" measures of unemployment, which are much higher. It should be noted that even the current weekly status definition of unemployment is a fairly restrictive one, which excludes large numbers of people who are effectively unemployed. Thus, the NSS reports a person as working if he or she had worked (i.e. pursued any economic activity) for at least one hour on at least one day during the 7 days preceding the date of survey.

Even with the increase in open unemployment, the decline in work participation rates cannot be fully explained by either education or unemployment. It seems that there must be other factors which are affecting the participation rates. In developed countries, much is made of the "discouraged worker effect", which means that those who find it difficult to get jobs often withdraw from the labour force. This is likely to have much less relevance in the Indian rural economy context where informal and self-employment are much more prominent, where social security systems are lacking and so the luxury of open unemployment is simply not available to most of the poor population.