DMPQ- What are the different methodologies to capture unemployment in India.

The National Sample Survey Organization (NSSO), since its inception in 1950, does the measurement of employment/unemployment in India.

The National Sample Survey Organization (NSSO) provides three different estimates of employment and unemployment based on different approaches used to classify an individual’s activity status. These are :

  • Usual status approach with a reference period of 365 days preceding the date of the survey.
  • Current weekly status approach with a reference period of seven days preceding the date of the survey
  • Current daily status approach with each day of the seven days preceding the date of the survey as the reference period
  • The Usual Status approach to measuring unemployment uses a reference period of 365 days i.e. one year preceding the date of the survey of NSSO for measuring unemployment. This approach records only those persons as unemployed who had no gainful work for a major time during the 365 days preceding the date of the survey and are seeking or are available for work. Thus, the estimates of unemployment obtained on the basis of the usual status approach are expected to capture long-term unemployment.
  • The Current Weekly Status (CWS) approach to measuring unemployment uses seven days preceding the date of the survey as the reference period. A person is considered to be employed if he or she pursues any one or more of the gainful activities for at least one hour on any day of the reference week. On the other hand, if a person does not pursue any gainful activity, but has been seeking or available for work, the person is considered as unemployed. The usual status approach to measuring unemployment fails to capture the short term fluctuations in employment and unemployment caused due to seasonality in labour markets.

However, CWS measures these short term fluctuations very well owing to its shorter reference period of a week.

  • The current daily status approach to measuring unemployment seeks to ascertain the activity status of an individual for each day of the reference week. It considers the activity status of a person for each day of the preceding seven days. The reference period here is a day. If a person did not find work on a day or some days during the survey week, he/she is regarded as unemployed. Normally if a person works for four hours or more during a day, he or she is considered as employed for the whole day. The daily status unemployment is considered to be a comprehensive measure of unemployment.
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