Parallel Session IARIW 2014

1. 1
Unemployment Burden and its Distribution:
Theory and Evidence from India
Sripam Motiram
Karthikeya Naraparaju
Presented by: Stephan Klasen
University of Göttingen
August 25, 2014
IARIW General Conference 2014

2. 2
What the paper is about
• Motivation:
– Unemployment unequally distributed;
– Can apply axioms from poverty measurement to
assess ist distribution;
– Important to assess inequality in unemployment in
India (by region, education, gender);
• Key Findings:
– Develops FGT-type unemployment measure that
considers distribution of unemployment intensity;
– Unemployment in India low, higher among women
and more educated people, increasingly unequally
distributed;

3. 3
Measure and Data
• Unemployment measure:
• S: share, ui/li unemployment “intensity” (unemployment
duration as a share of length of participation);
• Fulfils monotonicity, increasing marginals, and distribution
sensitivity;
• Data:
– National Sample Survey Employment and Unemployment
Survey,1993-2011;
– Problem: Know unemployment duration only of those who
are unemployment for entire reference period (7 days),
– How is length of unemploment/participation calculated?

5. 5

6. 6
Rural
Urban

7. 7

8. 8

9. Comments
• Nice paper on an important subject;
• Thinking about distribution of unemployment important;
• But application to India requires more interpretation:
– Unemployment rates low;
– Unemployment benefits?
– Unemployment basically a luxury problem: poor cannot afford to
be unemployed (p.18): The unemployed come from richer and
more educated families;
– So is this involuntary unemployment?
– Distinction unemployed/out of labor force not so clear (particularly
for women, see also Klasen and Pieters 2013)
• We know very little about true unemployment intensity
(only of those unemployed for entire reference week), so
measure likely to be seriously biased;
• Policy Implications? 9