Dinesh Kamath's Editorial 'Improve survey-based methods of measuring employment' that was published in Newsband

Improve survey-based methods of measuring employment

Better employment data will have to rely on large and frequent surveys, not misleading proxies. Most available evidence on employment creation (and associated economic indicators) contradicts the possibility of higher employment growth during 2017–18 over the previous year. The government think tank should work out how employment is tracked in India.

The measurement of employment in India has certain weaknesses: small samples, infrequent surveys, and lagged data release. There has been a long-standing need to have larger surveys as well as quicker, “real-time” indicators. It is meaningless to make a claim of new employment without accounting for employment figures for the rest of the labour market.

There are some disadvantages of administrative data sets. The specificities of these databases make them vulnerable to being misleading proxies. Biases creep into these data sets due to government policy changes. The willingness and intensity of enforcement may vary from year to year.

Both 2016–17 and 2017–18 were unusual years for the economy. With two far-reaching actions—demonetisation and the goods and services tax (GST)—the state clamped down on informal economic activities.

There is a need to improve survey-based methods of measuring employment. They should be similar to monthly non-farm payroll reports by the Bureau of Labour Statistics (BLS) in the United States (US). The BLS, however, relies on large-scale quick enterprise surveys supplemented by household surveys to compile information for its non-farm payroll reports. These surveys are somewhat similar to India’s Labour Bureau enterprise surveys, but are larger, conducted more regularly, and with systems that allow quick generation of information. Measuring the extent of employment growth is only one aspect of studying the labour market. It also involves studying the nature and conditions of work.

In India, what is most disappointing about this study and its dissemination is that neither the full paper nor the administrative data sets are in the public domain. Its findings are popularised for political gain.

Lack of Public and political recognition to surveys efforts and managers of survey (especially those in government) has caused a deterioration in data generated by government agencies. It is a sad reflection of our ideological bigotry that a third rate economics or social sciences student gets better recognition and sponsorship than a top grade statistics student. The latter remains only an assistant, while the former becomes an expert and administrator. Unless the situation improves, any data collection and data analysis effort is meaningless.