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

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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


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NCAER Labour Economics Research Observatory and New Skills at Work

Bornali Bhandari

New Delhi March 22, 2016

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Outline

  • Long-Run Challenge

– Demographic opportunity

  • Medium-Run Challenge

– Low employment-output elasticity – Uneven and volatile economic growth since 2008 and its impact

  • n 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

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LONG RUN

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Long-run Challenge: Young Population

15.0 5.0 5.0 15.0 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

2001

Female Male 15.0 5.0 5.0 15.0 0-4 5-9 10-14 15-19 20-24 25-29 30-34 35-39 40-44 45-49 50-54 55-59 60-64 65-69 70-74 75-79 80+

2011

Female Male

Source: Census

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Long-Run Challenge: Demographic Opportunity

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

2030 2010

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MEDIUM RUN Low employment output elasticity

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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.

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MEDIUM RUN Job Creation Post 2011

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But what about post 2011, a time

  • f business uncertainty
  • 4
  • 2

2 4 6 8 10 20 40 60 80 100 120 140 160 180

IIP and NCAER Business Confidence Index, January 2011 to January 2015

BCI IIP%YOY

Source: Bhide and Bhandari (2015) from NCAER BES Surveys

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Labour Markets show few signs

  • f movement

10 20 30 40 50 60 70 80 90

Percentage of Respondents: Changes in Labour Employed over the Last Three Months, January 2007 to January 2016

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

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And hiring has been weak

20 40 60 80 100

Percentage of Respondents: Expected Changes in Labour Employed over the Next Six Months, January 2007 to January 2016

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

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MEDIUM RUN Educational Attainment

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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

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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

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MEDIUM RUN Aspirations

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Education Aspirations of Chief Wage Earners

All-India Distribution of CWE Satisfied illiterate 26.8 42.1 literate but without formal schooling 3.6 40 up to 4th standard 8.3 44.6 primary (completed 5th–7th) 15.5 48.4 middle(completed 8th–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

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Aspiration for a Graduate degree dominates

0.0 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 100.0 illiterate literate but without formal schooling up to 4th standard primary middle matric higher secondary

Aspired Education level of Chief Wage Earners without a graduate/technical degree: All India, %

technical / diploma/ vocational graduate/professional and above

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61.% of CWEs are working in

  • ccupations of their choice

5 10 15 20 25 30 35 40 Aspiration for Grade 4 Job with Regular Salary: Skilled vs. Unskilled (all-India), % Regular salary - Grade 4 Unskilled Regular salary - Grade 4 Skilled

Source: NCAER-NSHIE 2010-11

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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
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Returns to investment in education

and skill or perceptions

  • Delhi

Distribution of CWE Satisfied illiterate 7 66.3 literate but without formal schooling 1.6 64 up to 4th standard 2.1 80.2 primary (completed 5th– 7th) 8.1 77.7 middle(completed 8th–9th) 13.2 80.5 higher secondary (12th) 14.3 93.5 technical / diploma/ vocational 1.4 96.6 Total 100 88.6

Source: NCAER-NSHIE 2010-11

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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

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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
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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

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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
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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
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NSAWI Proposed Program Themes

  • Market Mechanism

– Macro Factors – Signalling and screening – Apprenticeship – Guidance and counselling – Life-long learning – Role of Public and Private

  • And?
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Thank You!