Assembly Elections 2023: Unravelling patterns of labour force participation in the five states

A deep dive into the labour force and employment patterns in Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Telangana as they head into assembly polls.

Key Highlights

• The labour force participation rates remain higher than the national average across all five states

• The five states also have a higher share of their workforce which is self-employed, as compared to the all-India average

• While the overall unemployment rates are lower in all states as compared to the all-India average, unemployment remains a serious concern for persons with higher levels of education in all five states.

• Among the five states in focus, Chhattisgarh had the highest LFPR among the youth – over half of those aged 15-29 were part of the labour force in 2022-23, up from 35.7 percent five years ago. In Mizoram, on the other hand, only 28.4 percent of the young were part of the labour force

A new season of state elections is currently under way since November 7, with five states – Chhattisgarh, Madhya Pradesh, Mizoram, Rajasthan and Telangana – voting for their new Assemblies over a three-week period (Nov 07-30). The five states form an eclectic and diverse mix of socio-economic contexts and political histories. However, despite their many differences, concerns related to employment and labour force participation have been an essential part of the electoral conversation across all states. 

From unemployment allowances for the young, to promises of jobs (in the public sector and releasing a jobs calendar), from fee waivers for job recruitment examinations to an employment scheme targeted at the urban poor, and promises to fill up job vacancies, different political parties are promising a mix of solutions and opportunities to the electorate across the five states. 

In this analysis, we dive in to understand the labour force and employment situation in each of these states in greater depth. We look at broad trends and examine how these have changed in the past five years, and how the situation varies for men and women, and in rural and urban parts of these states.

The analysis that follows is based on data from the Periodic Labour Force Surveys, and unless otherwise mentioned, the numbers reflect trends in labour force participation for the working age population (i.e. those aged 15-59) by current weekly status. 

The labour force participation rates are higher in all five states as compared to the all-India average

Among the five states, Chhattisgarh recorded a Labour Force Participation Rate (LFPR) of 67.6 percent for the working age population in the year 2022-23. It was followed by Telangana with an LFPR of 63.6 percent, Mizoram (61.8 percent), Madhya Pradesh (60.1 percent) and Rajasthan (59.1 percent).

In all states, the LFPR in 2022-23 was an improvement over the LFPR in 2018-19 and is higher than the national average (Figure 1). This was also true in the rural parts of all states. Chhattisgarh had a rural LFPR of 70.2 percent in 2022-23, followed by Telangana (69.1 percent), Mizoram (63.8 percent), Madhya Pradesh (63.3 percent) and Rajasthan (61.6 percent). The all-India rural LFPR was 59.9 percent in this period. However, both Madhya Pradesh and Rajasthan’s urban LFPR was lower than the all-India urban LFPR of 54.2 percent in 2022-23. In Mizoram, Chhattisgarh and Telangana, the urban LFPR was 59.6 percent, 57.3 percent and 54.7 percent respectively.

The female LFPR remained higher in all the five states vis-a-vis the all-India average but the male LFPR was lower than the national average in Rajasthan, Mizoram and Telangana (Figure 2). 

Mizoram’s urban FLFPR is worth highlighting – in 2022-23, 46.4 percent of the state’s women (age 15-59) were part of the labour force, significantly higher than the corresponding all-India share of 26.7 percent (and up from 31.6 percent in 2018-19). On the other hand, only 19.9 percent of Madhya Pradesh’s urban women were part of the labour force in this period.

Across India, only 41.2 percent of the young (aged 15-29) were part of the labour force in 2022-23. Among the five states in focus, Chhattisgarh had the highest LFPR for this age group – over half (51.4 percent of those aged 15-29 were part of the labour force in 2022-23, up from 35.7 percent five years ago). In Mizoram, on the other hand, only 28.4 percent of the young were part of the labour force. The state has seen a decline in the LFPR for this age group – in 2018-19, 32.1 percent of the young were in the labour force. This went up to 35.8 percent in the subsequent year but has recorded a decline in each subsequent year ever since.

The rates of young women’s labour force participation remain low across all states but the gender gap is the widest in Madhya Pradesh (Figure 3). While 68.1 percent young men were part of the labour force in 2022-23, among young women the corresponding share was only 17.9 percent. This is also the lowest rate of FLFPR for this age group among all the five states. In Mizoram, the gender gap was the narrowest but the LFPR for both young men and young women was low (31 percent and 25.2 percent respectively). 

Unemployment rates vary from 2.3 percent in Mizoram to 7.9 percent in Rajasthan, but are significantly higher among those with higher levels of education 

Rajasthan recorded an unemployment rate of 7.9 percent in 2022-23, the highest among all states, while Mizoram recorded the lowest rate of unemployment among the five (2.3 percent).

Between 2018-19 and 2022-23, all five states have recorded improvement on this front. In Telangana, the unemployment rate fell from 10.8 to 6.1 percent. Mizoram saw stronger improvement – in 2018-19, the unemployment rate in the state was 10.1 percent and it decreased to 2.3 percent in 2022-23. Rajasthan’s unemployment rate decreased from 9.4 percent to 7.9 percent in this period, while MP’s decreased from 8.8 percent to 5.1 percent. 

Chhattisgarh is the only state where unemployment rates have seen a marginal increase, from 6.8 percent to 7.2 percent. It is worthwhile to note that the unemployment rate for men went down marginally in the state in this period (from 8.2 percent in 2018-19 to 7.9 percent in 2022-23), but that for women went up (from 3.5 percent in 2018-19 to 6.0 percent in 2022-23), another trend specific to the state.

Figure 4

*Aged 15-59. Numbers reflect percentages and years are of formal education.
Source: Unit level data, Periodic Labour Force Survey

Across all states – as is the case all-India – unemployment rates are higher among those with higher education levels. (Figure 4). And across them all, unemployment rates for women with 15+ years of education remain significantly higher vis-a-vis men. For instance, in Madhya Pradesh, the unemployment rate for men with 15+ years of education was 9.7 percent in 2022-23 and for women this rate was 23 percent. In Rajasthan, the corresponding rate for men was 21.8 percent and for women it was 37.7 percent. In Mizoram, 6.1 percent of men with 15+ years of education were unemployed while among women this share was almost 5 times (29.3 percent). 

Agriculture remains dominant across all five states, but in Mizoram and Telangana, services employs the largest proportion of workers

Agriculture remains a dominant sector in all five states going to polls this November – in all states, the share of workers engaged in agriculture, forestry and fishing was higher than the national average of 40.8 percent. In rural parts of the state, the share of the workforce engaged in agriculture, forestry and fishing ranged from 59.2 percent in Mizoram to 66.6 percent in Madhya Pradesh. 

Agriculture had become a fall-back option for many during the pandemic years, and the share of workforce engaged in the primary sector had expanded in that period. Barring Mizoram, the other four states too recorded some growth in the share of workforce engaged in this sector in 2019-20 (compared to the previous year). This share has seen some dip in subsequent years but in Rajasthan and Telangana, a higher share of the workforce was engaged in agriculture in 2022-23 as compared to 2018-19.

In Mizoram and Telangana, it is the services sector that employed the largest share of the total workforce in 2022-23 (Figure 5). The service sector assumes salience in urban areas, among the five states, it was the dominant sector engaging the majority of the workforce in the urban parts (from 67 percent in urban Rajasthan to 80 percent in urban Telangana). 

On the other hand, manufacturing employed a smaller share of workers in all five states, as compared to the all-India average (12.3 percent). An exception was Rajasthan where over a quarter of the urban workforce was engaged in manufacturing in 2022-23, up from 18.2 percent in 2018-19.

All five states have high shares of workers who are self-employed and this share has grown in the past five years

Across all the states in focus, more than half of the workforce was self-employed in 2022-23, with this share being the highest in Mizoram (67.6 percent) (Figure 6).

Patterns of self-employment remain highly gendered across India and the five states are not very different.

Across all five states, more than half of the men who were part of the workforce in 2022-23 were self-employed, with this share being much higher in rural areas. For example, 71.2 percent of men in rural Telangana were self-employed, as compared to 35.7 percent of their urban counterparts. Among male workers, Telangana has seen a notable growth in the share of self-employed workers in the past five years, a deviation from the national trends where this share has remained nearly stable in this period. This growth has come on the back of an increase in both – employers as well as unpaid helpers. 

Among women, the share of self-employed workers is even higher across all five states (higher than the all-India shares). In Mizoram, Rajasthan and MP, the share of women workers who were self-employed in 2022-23 was as high as 81.7 percent, 78.4 percent and 74.1 percent respectively. In rural parts of these states, these shares were even higher with 90.6 percent of rural women in Mizoram working as self-employed.

As CEDA has previously noted, recent years have seen a growth in the share of women who are self-employed, particularly those who are either own-account workers or work as unpaid helpers. 

Among the five states in focus, this trend has been particularly visible in Madhya Pradesh. The share of women who were self-employed has increased from 57.3 percent in 2018-19 to 74.1 percent in 2022-23 (Figure 7a). This was largely driven by a growth in the share of women workers who were working as unpaid helpers saw an almost 10-percentage point (41.8 percent in 2018-19 to 51.3 percent in 2022-23). Telangana, too, has seen a growing share of women workers who are self-employed, and this growth has been largely on account of those working as unpaid helpers.

Mizoram too saw a growth in the share of self-employed women, but here, this was driven by a growth in the share of women working as own-account workers. In 2018-19, 33.9 percent of women workers in the state were working as own-account workers. By 2022-23, their share had gone up to 51.3 percent. In the same period, the share of women workers who were in salaried jobs fell from 27.2 percent to 18 percent (Figure 7b). 

Rajasthan and Chhattisgarh have bucked this trend even though the share of women working as self-employed remains high in both states. In Rajasthan, the share of women working as self-employed saw a jump during 2019-20, but it has decreased marginally in each subsequent year.

Over half the workers engaged in salaried jobs in Chhattisgarh, Madhya Pradesh and Rajasthan in 2022-23 did not have written contracts and social security benefits

Not only is the share of workers employed in regular/salaried employment low across the board, a salaried job is no guarantee of access to social security benefits. 

Nearly three-fourths (73.5 percent) of salaried workers in Rajasthan did not have a job contract in 2022-23. While this is a staggering share, this indicator has seen some improvement in recent years. In 2018-19, the corresponding share was 79.5 percent and it increased to 84.8 percent in the following year. In Chhattisgarh, 68.6 percent of salaried workers had no written contracts. In Mizoram, the corresponding share was 10.1 percent, an improvement from 20.6 percent five years ago. 

Over 68 percent of salaried workers in Chhattisgarh, 62.6 percent of salaried workers in Rajasthan and 60.1 percent salaried workers in MP did not have any social security benefits in 2022-23. The corresponding all-India share was 52.9 percent. Mizoram fared much better again – the share of salaried workers with no social security benefits was 10.9 percent.

Figure 8

Numbers reflect percentages.
Source: Unit level data, Periodic Labour Force Survey

Over a sixth of salaried workers in Chhattisgarh and 57 percent in Rajasthan had neither a written contract or social security benefits. In Madhya Pradesh, this was true of 51.4 percent salaried workers, while in Telangana and Mizoram, the share was 34.1 percent and 7.8 percent respectively. Barring Telangana, in the other 4 states, the share of salaried workers without written contracts and social security has only grown in the past five years, alluding to the precarious nature of employment opportunities. 

In all states (except Rajasthan), a higher share of female salaried workers did not have social security benefits as compared to their male counterparts. And in all states (except Mizoram), salaried workers in rural areas were less likely to have written contracts and social security benefits than their urban counterparts.

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