Unemployment Burden and its Distribution: Theory and Evidence from India

We develop a measure of unemployment that takes into account both the level and intensity of unemployment and that satisfies several desirable properties, including distribution sensitivity (dealing with differences among the unemployed). It can also be decomposed into mean and distributional compon...

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Bibliographic Details
Published inIDEAS Working Paper Series from RePEc
Main Authors Motiram, Sripad, Naraparaju, Karthikeya
Format Paper
LanguageEnglish
Published St. Louis Federal Reserve Bank of St. Louis 01.01.2014
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Summary:We develop a measure of unemployment that takes into account both the level and intensity of unemployment and that satisfies several desirable properties, including distribution sensitivity (dealing with differences among the unemployed). It can also be decomposed into mean and distributional components and contributions to unemployment by various subgroups of the population. We then apply this measure to understand unemployment in India using data from National Sample Surveys on employment and unemployment during the period 1993-2012. We show that unemployment has generally fallen in this period, but this finding has to be seen in light of considerable underemployment. Moreover, unemployment is driven to a greater extent by higher educated groups; the unemployment among these groups is also fairly substantial. The distribution of unemployment has also worsened. We explain these findings and suggest some policies.