Recent changes in work force participation among elderly in India: evidence from National Sample Survey data

Antara Dhar, University of Calcutta
Zakir Husain, Indian Institute of Technology, Kharagpur
Mousumi Dutta, Presidency University

Given the failure of the state to ensure that the vulnerable elderly sections of the population is covered and disintegration of traditional family structures coupled with rapidly increasing dependency ratios, the labour market seems a possible tool to ensure security to the elderly. How well the labour market in India has succeeded in this front is analysed in this study. Unit level National Sample Survey data for the 55th (1999-2000) and 66th (2009-10) rounds are used. Our analysis finds a decline in workforce participation rate among elderly. This is accompanied by a high level of informalisation of the aged workforce. This may be interpreted as a concerning sign, particularly if we view the informal sector as a traditional, low productive and stagnant sector. However, when we take into account the effects of rural growth and expansion of employment opportunities in the manufacturing sector, the decline in WFPR appears more as a deliberate withdrawal from the labour force, rather than forced unemployment. Moreover, recent studies have pointed out that the informal sector is not homogeneous, but may contain a highly vibrant and productive segment with close links to the formal sector. If, using their skill and experience, aged workers are able to secure work in these sectors the growing informalisation need not necessarily be alarming. This possibility, however, should not let us to conclude that the condition of aged workers has improved. Analysis of occupational structure and earnings reveals that aged workers are employed in sectors that are typically low earning. Further, their own wages are lower than the low average earnings in these occupational categories. This remains a sign of concern that needs to be addressed by policy makers and studied by researchers.