Changing Structure of Rural Employment in Bihar: Issues and Challenges
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Changing Structure of Rural Employment in Bihar: Issues and Challenges Maryam Sabreen1 · Deepak Kumar Behera1 Accepted: 2 September 2020 / Published online: 8 October 2020 © Indian Society of Labour Economics 2020
Abstract In India, Bihar has been among the less developed states, but has been showing an impressive growth pattern in recent years. While Bihar’s economic structure is changing, the pattern of labour employment is also presenting a shift from farm to non-farm sector. The share of the workforce employed in agriculture has declined from over 70% to around 40% between 2004 and 2017–2018, while the share of employment in industries and services has increased substantially. The growth of non-farm employment provides opportunities to contain the pressing unemployment problem which according to the current Periodic Labour Force Survey (PLFS) 2017–2018 report has recorded more than 7% of the unemployment rate (UR). The rural sector that constitutes a major portion of farm employment has also seen a growth of employment in the non-farm sector, though the rate of unemployment here has increased at a faster rate. While migration has been an important aspect of Bihar’s economy, there is a need to provide employment in rural areas, particularly the rural non-farm sector that would directly affect the unemployment problem in urban centres. Thus, using the latest PLFS (2017–2018) data set, this paper provides a comprehensive analysis of the structural transformation in Bihar since bifurcation and more importantly the changing employment structure focus on rural areas. Keywords Employment · Unemployment · Structural transformation · Rural JEL Classification E24 · J21 · O18
* Maryam Sabreen [email protected] Deepak Kumar Behera [email protected] 1
Department of Humanities and Social Sciences, National Institute of Technology (NIT) Patna, Ashok Rajpath, Bihar 800 005, India
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Vol.:(0123456789) ISLE
834
The Indian Journal of Labour Economics (2020) 63:833–845
1 Introduction Employment of countries’ factors of production determines countries’ growth trajectory. India being labour-abundant economy, job opportunities for labour force have remained core to India’s planning process. Moreover, employment provides a sustainable solution to the problems of growth as well as inequality. This is true, as growth creates jobs, and jobs further drive growth that eventually mitigates problems arising out of rising inequality (Nayyar 2017). However, as the economy develops, not only does the economic structure change but the share of employment of labour in different sectors also changes. In the works of Fisher (1939), Clark (1940), Kuznets (1971) and Chenery and Syrquim (1975), the most prevalent structural transformation observed historically has been referenced where the economic development brings about changes in the share of sectoral contribution of the national income as well as workforce. The established pattern of structural transformation suggests that with development, like income, the share of employment in
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