Bornali Bhandari New Delhi March 22, 2016 Outline Long-Run - PowerPoint PPT Presentation

NCAER Labour Economics Research Observatory and New Skills at Work Bornali Bhandari New Delhi March 22, 2016

Outline • Long-Run Challenge – Demographic opportunity • Medium-Run Challenge – Low employment-output elasticity – Uneven and volatile economic growth since 2008 and its impact on job creation – Educational Attainment – Aspirations – Returns to investment in education and skill or perceptions – Skill Gap • New Skills at Work India (NSAWI) – Program Description – Objectives – Proposed Themes

LONG RUN

Long-run Challenge: Young Population 2001 2011 Female Male 80+ 80+ Female Male 75-79 75-79 70-74 70-74 65-69 65-69 60-64 60-64 55-59 55-59 50-54 50-54 45-49 45-49 40-44 40-44 35-39 35-39 30-34 30-34 25-29 25-29 20-24 20-24 15-19 15-19 10-14 10-14 5-9 5-9 0-4 0-4 15.0 5.0 5.0 15.0 15.0 5.0 5.0 15.0 Source : Census

Long-Run Challenge: Demographic Opportunity 2030 2010 Source : Bloom, D. E. (2011). Population Dynamics in India and Implications for Economic Growth . Harvard Initiatives for Global Health Series Working Paper No. 65. www.harvard.edu

Low employment output elasticity MEDIUM RUN

Decline in output elasticity of employment Source : Basu, D. and D. Das (2016). Employment Elasticity in India and the US, 1977-2011: A Sectoral Decomposition Analysis. Economic and Political Weekly . Volume L1. No. 10. March 5.

Job Creation Post 2011 MEDIUM RUN

But what about post 2011, a time of business uncertainty IIP and NCAER Business Confidence Index, January 2011 to January 2015 180 10 160 8 140 6 120 4 100 80 2 60 0 40 -2 20 0 -4 BCI IIP%YOY Source : Bhide and Bhandari (2015) from NCAER BES Surveys

Labour Markets show few signs of movement Percentage of Respondents: Changes in Labour Employed over the Last Three Months, January 2007 to January 2016 90 80 70 60 50 40 30 20 10 0 No change in skilled labour employed over the last three months Increae in Skilled labour employed over the last three months No change in unskilled labour employed over the last three months Increase in unskilled labour employed over the last three months Source : NCAER BES Surveys

And hiring has been weak Percentage of Respondents: Expected Changes in Labour Employed over the Next Six Months, January 2007 to January 2016 100 80 60 40 20 0 No expected change in skilled labour employed over the next six months Expected increase in skilled labour employed over the next six months No expected change in unskilled labour employed over the next six months Expected increase in unskilled labour employed over the next six months Source : NCAER BES Surveys

Educational Attainment MEDIUM RUN

76% literate and.. Distribution of Literate Population as per Education Level, 2011 Literate but below matric/secondary Matric/secondary but below graduate Technical diploma or certificate not equal to degree Graduate and above other than technical degree Technical degree or diploma equal to degree or post-graduate degree Source : Census 2011

86.7% main workers, 77.4% marginal workers literate and.. Distribution of Literate Main Workers as per Education Level, 2011 Literate but below matric/secondary Matric/secondary but below graduate Technical diploma or certificate not equal to degree Graduate and above other than technical degree Technical degree or diploma equal to degree or post-graduate degree Source : Census 2011

Aspirations MEDIUM RUN

Education Aspirations of Chief Wage Earners All-India Distribution of Satisfied CWE illiterate 26.8 42.1 literate but without formal schooling 3.6 40 up to 4th standard 8.3 44.6 primary (completed 5 th – 7th) 15.5 48.4 middle(completed 8 th – 9th) 16.2 51.9 matric (completed 10th – 11th) 14.3 62.5 higher secondary (12th) 6.8 67.2 technical / diploma/ vocational 1.2 81.4 graduate 5.1 83.7 post – graduate 1.7 87.7 professional & higher research degrees 0.6 95.4 Total 100 53.1 Source : NCAER-NSHIE 2010-11

Aspiration for a Graduate degree dominates Aspired Education level of Chief Wage Earners without a graduate/technical degree: All India, % 100.0 90.0 80.0 70.0 60.0 50.0 40.0 30.0 20.0 10.0 0.0 illiterate literate but up to 4th primary middle matric higher without standard secondary formal schooling technical / diploma/ vocational graduate/professional and above

61.% of CWEs are working in occupations of their choice Aspiration for Grade 4 Job with Regular Salary: Skilled vs. Unskilled (all-India), % 40 35 30 25 20 15 10 5 0 Regular salary - Grade 4 Unskilled Regular salary - Grade 4 Skilled Source : NCAER-NSHIE 2010-11

Returns to investment in education and skill or perceptions • Bhandari and Bordoloi (2006) – Greater levels of education increase both the likelihood of being employed as well as the income earned from work. – Returns from elementary (primary and middle) education are quite low. – Women, lower social groups, rural residents, non-English speakers have both significantly lower incomes and a lower likelihood of being employed. • Azam, Chin and Prakash (2010) using IHDS 2004-05 show that males who can speak fluent English earn a wage rate of Rs. 42 per hour as compared to a wage of Rs. 10 per hour for a non-English speaking male. The respective wage rates for females are Rs. 33 and Rs. 6 per hour. • The Case of Delhi

Returns to investment in education and skill or perceptions • Delhi Distribution of CWE Satisfied illiterate 7 66.3 literate but without formal 1.6 64 schooling up to 4th standard 2.1 80.2 primary (completed 5 th – 8.1 77.7 7th) middle(completed 8 th – 9th) 13.2 80.5 higher secondary (12th) 14.3 93.5 technical / diploma/ 1.4 96.6 vocational Total 100 88.6 Source : NCAER-NSHIE 2010-11

Skill Gap • 24 Priority Sectors identified • Employment Base in 2013: 461.1 million • Projected employment by 2022: 581.89 million • Incremental HR requirement: 120.79 million • Recognition of Prior Learning , reskilling, upskilling and skilling of the existing workforce especially below 45 years of age: 298.25 million • Skilling for new entrants 2015-22: 104.62 million • Total skilling requirement: 402.87 million Source : National Policy for Skill Development and Entrepreneurship 2015

Program Description • 2 years and 3 phases • Phase 1: A Review – Literature – Secondary Data Analysis including Census, NSSO, IHDS and NSHIE, MHRD, DISE etc. – Sampling strategy • Phase 2: Baseline survey of skills in Delhi of education, employment and employability – Why Delhi? • Mix of Manufacturing and Services in the NCR Region • Phase 3: Baseline survey of skills of Urban India

Program Objectives • Baseline of skills based on a large nationally representative survey – Employers Survey – Employees • Need to measure cognitive skills, socio-emotional skills, and job- relevant • Potentially benchmark India against other countries • Identify job-relevant skills and policies and institutions to enhance job mobility and job matching

NSAWI Proposed Program Themes • Demand side (Jobs) – Informal sector – Occupation • Wage • Productivity • Skill shortage & vacancies • Services & manufacturing sector – Labour laws & regulation – Job creation • Entrepreneurship & innovation • Jobs creation in 24 priority sectors

NSAWI Proposed Program Themes • Supply side (Education and Employability) – Migration and commuting – Education & skills • Cognitive • Non-cognitive • Vocational • Socio-emotional – Social perception & Inclusiveness • Gender discrimination • Socially & geographically disadvantaged, and marginalized groups – Capacity building and training • Role of public and private sector • Sources of funding

NSAWI Proposed Program Themes • Market Mechanism – Macro Factors – Signalling and screening – Apprenticeship – Guidance and counselling – Life-long learning – Role of Public and Private • And?

Thank You!