A Deeper Look Beyond the Unemployment Rate
UPSC Relevance
Prelims: Indian Economy (Labour Force concepts - Unemployment Rate (UR), Labour Force Participation Rate (LFPR), Worker Population Ratio (WPR); Periodic Labour Force Survey (PLFS); Types of employment).
Mains:
General Studies Paper 1 (Society): Population and associated issues; Poverty and developmental issues; Regionalism.
General Studies Paper 3 (Economy): Indian Economy and issues relating to planning, mobilization of resources, growth, development and employment; Inclusive growth and issues arising from it. This is a classic case study for regional disparities in development and the challenges of employment generation.
Key Highlights from the News
Although Bihar's Unemployment Rate (UR) is officially low (3%), the article argues, based on Periodic Labour Force Survey (PLFS) data analysis, that this is a misleading statistic.
The Real Problem: In Bihar, the Worker Population Ratio (WPR) is very low. Additionally, the Labour Force Participation Rate (LFPR), which indicates the number of people actively seeking jobs, is also very low.
Many unemployed individuals have stopped looking for jobs due to a lack of opportunities. This is known as the "Discouraged Worker Effect". Because they are not actively looking for work, they are not included in the official unemployment figures.
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