Number Theory: What does NFHS tell us about the pandemic’s employment impact?

An HT analysis of unit level data from the National Family and Health Survey (NFHS) shows that the economic pain in labour markets did not decrease enough with the removal of lockdown restrictions.

Did the Covid-19 pandemic have a lasting impact on employment in India? There is no official data to answer this question in a comprehensive manner at the moment. The latest annual report of the Periodic Labour Force Survey (PLFS) – it is the official source of employment statistics in India – is available for the July 2019 to June 2020 period. It does show a sharp increase in unemployment during the period of the 68-day long nationwide lockdown which began

The National Family and Health Survey (NFHS) – it was conducted between June 2019 and May 2021 – emerges as a useful proxy for the pandemic’s impact on employment. (Sanchit Khanna/HT PHOTO)

The NFHS is not focused on employment alone, and there is a qualitative difference between employment statistics available in NFHS and PLFS. (HT Illustration)

NFHS data does suggest a lasting adverse impact of the pandemic on labour markets

One way to overcome the seasonal contamination problem in the NFHS is to compare clubbed districts which were surveyed before and after the lockdown and compare the change in their employment indicators with the previous round which was conducted in 2015-16. HT has used a unit level data analysis to make three such district groups – districts surveyed completely before March 2020, districts surveyed partly before and partly after March 2020 and districts surveyed completely after March 2020 – to make this comparison. To be sure, no district was canvassed between April 2020 and September 2020 and the NFHS only resumed from October 2020 onwards, by when the lockdown restrictions had been largely removed (so when we say after March 2020, it automatically means after September 2020).

A simple comparison of headline employment numbers – currently working, and who usually work all year – shows the biggest proportional fall in male employment for the districts which were surveyed after March 2020. For women, the degree of increase in employment was less in districts surveyed after the pandemic than in those surveyed before. To be sure, an increase in women’s work participation is not surprising -- it increased by a bigger degree compared to men even between the 2017-18 and 2019-20 PLFS. This calculation has excluded respondents who reported working seasonally or occasionally as it would not be uncommon for them to not be working when the survey was being conducted.

A simple comparison of headline employment numbers – currently working, and who usually work all year – shows the biggest proportional fall in male employment for the districts which were surveyed after March 2020. For women, the degree of increase in employment was less in districts surveyed after the pandemic than in those surveyed before. (HT Illustration)

NFHS data also shows a shift towards farming/manual work

For men, who constitute a majority of the work force and largely drive the overall labour market trends, the NFHS data show a change which is similar to what is seen in the PLFS data: a shift towards agriculture. The share of men employed in agricultural work increased in the districts surveyed after the pandemic in NFHS, while this share decreased in the districts surveyed before the pandemic. A somewhat similar trend – more increase in post-pandemic districts than in pre-pandemic ones – is seen for share of men doing manual work. To a lesser degree, these trends were also true for women.

The share of men employed in agricultural work increased in the districts surveyed after the pandemic in NFHS, while this share decreased in the districts surveyed before the pandemic. To a lesser degree, these trends were also true for women.

To be sure, because NFHS does not allow comparison of quarters, it is possible that the long-term trends of specific regions have contributed to the trends shown above. Therefore, it is only PLFS that can give complete clarity on the post-pandemic scenario in the job market.