India Unemployment Rate Spiked To 23% Post Lockdown, Says CMIE

India’s labour indicators worsened significantly as the country went into lockdown in the last week of March.

While India does not have high frequency labour market data, the unemployment rate put together by the Centre For Monitoring Indian Economy, or CMIE, shows a spike in the unemployment rate in the last week of March and the first week of April.

The data was put out on CMIE's website with the caveat that normal survey operations were interrupted following the nationwide restrictions announced on March 24.

The unemployment rate had started to rise even before the lockdowns and stood at 8.7 percent for the full month of March. “This is the highest unemployment rate in 43 months. Or, since September 2016. The rate has climbed rather steeply from the 7.16 per cent level of January 2020,” Mahesh Vyas, chief executive officer of CMIE, wrote on the website.

However, the overall monthly number does not give the full view.

According to Vyas, while the survey was suspended after March 24, field workers continued to report observations for the survey. In addition, telephonic interviews were conducted. In all, CMIE managed to collect 2,289 observations in the last week of March, spread evenly over rural an urban areas.

The unemployment rate represents the percentage of people who were looking for jobs who failed to find one. The employment rate represents the number of working age people in a region who have jobs. The labour force participation rate is number of employed and those seeking employment as a percentage of the working age population.

CMIE continued to collect the same data for the week ended April 5. During this week, the agency collected 9,429 observations.

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“These yielded an unemployment rate of 23.4 percent during this week; an LPR of 36 percent and an employment rate of 27.7 percent,” Vyas wrote.

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To be sure, the sample size used for the observations in the last two weeks is much smaller than what CMIE uses. The average sample in the preceding six months was 117,382 individuals of more than 14 years of age.