UP's Youth Labour Force Participation Rate Has Fallen Substantially in Last 3 Years: CMIE Data

Chief minister Adityanath recently promised over two crore jobs for the state's young people in the next three-four years. As Akhilesh Yadav pointed out, that would mean about 13,700 new jobs created per day or 4.17 lakh jobs per month.

New Delhi: Data released by the Centre for Monitoring the Indian Economy (CMIE) has revealed a worrying detail about the employment situation in Uttar Pradesh: youth labour participation rates in the states have been falling consistently since the COVID-19 pandemic began.

While the unemployment rate in Uttar Pradesh, at 4.2%, is much lower than the all-India average of 7.1%, just looking at this number distorts the true employment picture. Once looked at in congruence with the overall decline in employment and labour force participation – particularly for the 20-24 years age group – the scenario no longer looks rosy.

The labour force participation rate measures the number of people in the working age population who are actively working or looking for work. A declining labour force participation rate suggests that people are dropping out of the workforce entirely, because they do not see any employment opportunities for themselves.

Before the pandemic, the labour force participation rate for the youth in UP was 41.2%, according to CMIE data. It fell drastically to 31.3% in May-August 2020, triggered by the COVID-19 pandemic. It then continued to fall to 27% in May-August 2021, 22.5% in May-August 2022 and 22.4% in September-December 2022. The latest data, therefore, suggests that the downward trend is still continuing, despite pandemic-related restrictions having been lifted quite some time ago.

Also read: Public Sector Job Creation Fell by Nearly 8.8% in 2022: Report

“There was also a striking fall in employment rate among youth aged 20-24 years in Uttar Pradesh,” CMIE’s Mahesh Vyas writes. “Falling employment rate, which is the proportion of working age population that is employed, is a distressing outcome signifying lack of employment opportunities for youth in the state.”

“The employment rate for youth in the 20-24 years age bracket fell from 27 per cent in September-December 2019 to 17.4 per cent in September-December 2022,” Vyas continues. “This translates to a fall in the number of employed youth in this age group by 1.1 million.”

Both the labour force participation rate and employment rate in UP have fallen more dramatically for young men than for women, the data says. In September-December 2019, the employment rate for men aged 20-24 years was 47%, but by September-December 2022, this had fallen to 27.8%. For women aged 20-24, the employment rate started at a very low 1.6% in September-December 2019, and fell to 1% by September-December 2022.

Among men, the fall in employment rates was higher in rural areas than in urban.

“The downswing in labour participation rate and employment rate among youth of 20-24 years of age in Uttar Pradesh poses a serious challenge,” Vyas argues. “Persons in this age group mostly comprise of those who are just entering the labour market after education. Declining labour participation among these youngsters suggests that they are discouraged by the prevalent labour market condition in the state, and are increasingly choosing to stay out of the labour force instead.”

While these numbers are worrying on their own, they are perhaps even more concerning when read alongside the state chief minister’s questionable – and likely unrealistic – plans on providing employment to the youth. Recently, he promised over two crore jobs for the state’s young people in the next three-four years, soon after he said his government would be taking the states GDP $1 trillion in the next five years. As analysts pointed out, these numbers are likely bluster – as M.K. Venu wrote in The Wire, “the UP chief minister’s promise is divorced from reality”.

Taking on Adityanath’s claim, Samajwadi Party leader Akhilesh Yadav has said that the only way the BJP can prove that it is not lying to the electorate on its fantastical job creation promise is by releasing regular, credible data showing that it is creating approximately 13,700 jobs per day or 4.17 lakh jobs per month.