Pure casual labourers and the precariously employed in the process of economic development and

35

6. Conclusions

In the foregoing discussion we have tried to argue and illustrate relatively better ways of measuring employment at an economy-wide level in developing countries. Efforts in these directions can be made and would improve both monitoring and macro analysis. Unless these ways of seeing employment are integrated in to our macro level measurement of employment in developing countries, employment policies will remain disjointed from poverty reduction policies; and growth policies from employment policies. If anything they will only find superficial integration through truisms that claim employment is central to forge the link between growth and poverty reduction. We begin with some minor conclusions of the paper with implications for popular practice, and then go on to broader findings. Aggregating the employed as it is calculated across advanced and developing countries, is unjustifiable; and using the employment category in cross sectional statistical analyses that include both advanced and developing countries is problematic. This is because employment as it is calculated at the macro level in developing countries is not economically meaningful, while the same category has a plausible economic meaning associated with it in advanced economies. The same is the case with the unemployment rate which is used much more in analysis. The unemployment rate does not capture economy- wide unemployment in developing countries, while in advanced economies it mostly does. Presuming that the unemployed occupy the same categorical space in developing economies as they do in advanced countries is therefore wrong. Moreover the unemployed in developing economies contain two very different types of workers without work; the majority are the long run unemployed who are neither the worst off in the labour market nor likely to be the lowest productivity workers when in employment. It can also be said that estimates of composite indicators of adverse parts of the dual economy either from the income or output perspective need to be carefully conceived. Whatever name is given to them - if these indicators exclude important parts of labour market adversity, they cease to have economy-wide meaning. So for example excluding rural activities from estimate of “informal” employment; or excluding pure casual workers from what is called “vulnerable” employment is completely arbitrary and makes these categories not only partial and obviously problematic for monitoring purposes. We now recap some general associative tendencies between our measures of employment and long run development and short run growth. Table 1. Direction of associations between employment categories and the level of national income and economic growth in developing economies = statistically significant Per capita income and long run development Short run growth Employment as a of labour force No relation No relation Unemployment rate Positive Positive Regular employment as a total employment Positive Positive Adequately paid employed as a total employment Positive Positive Non- regular employment as a of total employment Negative Negative of which Self-Employment as a of total employment Negative Negative Causal Employment as a of total employment Positive Positive Working poor as a of total employment Negative Negative 36 In the development and growth process as per capita incomes rise, regular employment rates as well as income based measures of the adequately paid amongst the employed would tend to rise. We should simultaneously expect underemployment amongst the non-regularly employed to decline and the unemployment rate to become slightly more representative of economy-wide unemployment. This may even show up as a rise in the unemployment rate. Within the group of underemployed workers, the self-employed are likely to be the category that is subject to positive transformation. The self-employed are likely to decline in incidence but in the process become increasingly non-poor. As economies grow the bulk of the decreasing underemployment in them is likely to fall on casual type of activities. Thus with the development process, economy-wide “underemployment” that is disguised and embedded in the calculation of the “employed” – which at lower levels of development primarily manifests itself in a higher incidence of non- regular employment and in low rates of unemployment – begins to alter its manifest composition. The incidence of casual labour may show a tendency to rise as the incidence of self-employment falls. At the same time unemployment rates may begin to rise with growth. From a policy perspective the general category in need of greatest macro policy attention in typical developing countries is of persons who are employed on a non- regular basis. These include the self-employed as well as casual workers. Both these categories face underemployment. As we suggest these categories are subject to dynamic changes. The other focus of policy attention needs to be on the conditions of work of the regularly employed and the enhancement of support systems to those who are unemployed for longer periods and queue for regular jobs. The unemployed may dominantly be non- poor but they are also not well off. This focus becomes increasingly important as developing economies grow and become richer. The problem facing economy-wide assessments of employment in developing economies is not that we lack theory or supportive micro level empirical knowledge of how transformations come about; but rather that we are forced to use the twin categories of employment and unemployment rates for the ostensible lack of other useable data at the economy wide level. This makes a meaningful economy wide empirical assessment of the employment situation in a developing country impossible. The importance of having plausible economy-wide indicators is three fold. It lies in monitoring; presenting meaningful aggregations across countries; and in conducting macro level analysis across developing economies and within economies over time. In particular, for international institutions that need to say something meaningful about employment in the developing world at any of these aforementioned levels, this often becomes a serious problem. We have argued in this paper that there is a need to fundamentally and practically rethink the measurement of macro level employment categories in line with basic development theory. At present economy-wide categories are produced mechanically with an ahistorical template that is more appropriate for the typical non-recessionary advanced economy. Our work suggests interim directions to follow as a way forward in a very poor data situation. 37 Selected Bibliography Anand, S., P. Segal and J.E. Stiglitz eds. 2010. Introduction in Debates in the Measurement of Global Poverty , Oxford University Press. Basu, Kaushik. 1997. Analytical Development Economics . MIT Press. Binswanger, Hans P. and Mark R. Rosenzweig eds. 1984. Contractual Arrangements, Employment, and Wages in Rural Labor Markets in Asia . Yale University Press, New Haven. Bourguignon, François. 2003. “The growth elasticity of poverty reduction”, in Eicher, T. and Turnovsky, S. eds., Inequality and Growth , MIT Press. Card, David. 2011. Origins of the Unemployment Rate: The Lasting Legacy of Measurement without Theory . NBER. Available at http:davidcard.berkeley.edupapersorigins-of- unemployment.pdf. Dasgupta, A.K. 1954. “Keynesian Economics and Underdeveloped Countries”, Reprint of 1954 article in Economic and Political Weekly , Vol. 38, No. 28, pp. 2919-2922. Dreze, J. and A. Mukherjee. 1987. Labour contracts in rural Asia: Theories and evidence , Discussion Paper No. 7, Development Research Programme, London School of Economics and Political Science. Ghose, A.K. 2004. “The Employment Challenge” in India Economic and Political Weekly , November 27. Ghose, A.K., N. Majid and C. Ernst. 2008. GEC The Global Employment Challenge , International Labour Organisation ILO, Geneva. International Labour Office ILO. 2007. Yearbook of Labour Statistics: Time Series . Geneva. ––. Key Indicators of the labour market KILM , Various years. Geneva. ––. LABORSTA online database . http:laborsta.ilo.org. Lewis, W.A. 1954. Economic Development and Unlimited Supplies of Labour , The Manchester School, Vol. 22. Majid, N. 2001. “The working poor in developing countries” in International Labour Review , Volume 140, No. 3. ––. 2005. On the evolution of employment structure in developing countries . Employment Strategy Paper 200518. ILO, Geneva. ––. 2010. On the income dimension of employment in developing countries. Employment Working Paper No. 72. ILO, Geneva. ––. 2010a. A note on adverse employment forms in advanced economies . Mimeo ––. 2011. What has really happened to poverty and inequality during the growth process in developing countries? Employment Working Paper No. 96. ILO, Geneva. Osmani, S. R. 2002. Exploring the employment nexus: Topics in employment and poverty . A report prepared for the Task Force on the Joint ILO-UNDP Programme on