An age-wise profile of India’s workers | Number Theory

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Thanks to the roll-out of the four Labour Codes, India’s labour market is in the news. While a lot of focus is currently on the debate between the supporters and opponents of the new Labour Codes, and about the extent of their potential benefits, it is useful to look at the age-profile of Indian labour markets. This two-part series will try and do exactly this: Give an age-wise breakup of workers by their employment, nature, and industry of work. Here is what the data shows.

Representational image. (Unsplash)

An age-wise profile of India’s workers

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  Employment peaks in the 35-54 age cohort

  The basic classification of a population when it comes to the labour market is whether people are working, want to work but cannot find a job, and are not looking for work. In technical parlance, these people are classified as employed, unemployed, and out of the labour force. Data from the Periodic Labour Force Survey (PLFS) shows that the share of employed population peaks in the 35-44 and 45-54 age groups. Unemployment is the highest in the 15-24 and 25-34 age groups. What is slightly counter-intuitive is the fact that the share of working people drops sharply in the 55-64 age group.
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  Salaried work peaks even earlier in India

  These pages had pointed out earlier that just about one-fifth of India’s workers are in salaried jobs. An age-wise breakup of workers by the kind of jobs they hold shows that the share of salaried workers peaks much earlier than all workers in India. It increases from 25.9% in the 15-24 age group to 29.8% in the 25-34 age group and then falls consistently.
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  Which could be a reflection of their rising share in overall employment in the recent past

  A slightly long-term comparison of the break-up of employment in India shows that the share of salaried jobs has been rising in recent past. This number was 13% in the 1993-94 Employment Unemployment Survey (EUS) and has increased to 22.4% by the 2024 PLFS. To be sure, this trajectory did suffer in the aftermath of the pandemic’s economic disruption, but there seems to be a process of reversion to the pre-pandemic trajectory in more recent data.
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  Manufacturing salaried employment falls with age, services see a rise

  The share of salaried jobs in services is more than three times the share in manufacturing. To be sure, this is not surprising given the fact that almost a similar gap exists between manufacturing and services even in terms of share in Gross Value Added (GVA). However, what is interesting is the difference in the trajectory of share of manufacturing and services in total salaried jobs by age group of workers. The number almost consistently – the only exception is the 65 and above age group – falls for manufacturing as one goes up the age ladder whereas the trend is exactly the opposite for services. Any labour reform, while it concerns all of the economy, must have a greater focus on younger workers because this is where the future of the economy lies.