Employment rate differences between PLFS & CPHS

All the data provided in the Periodic Labour Force Survey Quarterly Bulletin is based on the Current Weekly Status (CWS). Under this system, a person is considered to be employed, unemployed or out of the labour force depending upon the activities of the person during the seven days preceding the day of the survey.

This is much better than the more frequently used Usual Status that depends upon activities of the person during 365 days preceding the date of survey.  The Usual Status is fraught with problems of recall. The CWS is based on much better recall.

However, the CWS definition is still quite relaxed. It is: "A person is considered working (or employed) if he/ she worked for at least one hour on at least one day during the 7 days preceding the date of survey."

Compare this to CMIE's definition in its CPHS where a person is considered employed if s/he is employed on the day of the survey or, if the status on the day of survey is uncertain, then if the person was employed on the day preceding the day of the survey. The preceding day is conditional upon the status of the first day being uncertain. Such uncertainties arise when a survey is conducted in the morning and, say, a daily wage worker is not sure of whether s/he would get a job on the day. Only in such cases do we rely upon the status of the preceding day. The ambiguity regarding the status in the CPHS is therefore, almost zero. This cannot be said for the PLFS.

Since the reference period in the PLFS is a week, often people are concurrently present in more than one statuses during the week. For example, a person could have worked for an hour and then remained unemployed looking for a job for most of the rest of the six days of the week. In such cases, PLFS uses the priority criterion where the employed status gets priority (arbitrarily) over the unemployed status.

The CPHS does not face this problem because the reference period is just one day and the status of a day is unambiguous. Consequently, there is no need to introduce arbitrary rules of priorities.

As a result, the PLFS-CWS definition of a person being classified as employed allows more people to be called employed than the CMIE-CPHS definition. This should show up in a higher Worker Population ratio than the Employment ratio -- the equivalent ratio in CPHS. And, it does.

The urban worker-population ratio according to PLFS based on CWS in the April-June 2018 quarter was 41.8 per cent. The corresponding value in CPHS was 38.4 per cent. In the July-September 2018 quarter the values were 42.2 per cent and 38.2 per cent and in the October-December 2018 quarter the values were 42.2 per cent and 38 per cent. PLFS estimates of urban worker-population ratio are about four percentage points higher than the CPHS estimates.

The difference persists across gender but it is a lot more pronounced in the case of women workers. The average urban worker-population ratio for men in the PLFS was 66.9 per cent during April-December 2018. The corresponding ratio in CPHS was 65.6 per cent, implying a difference of only 1.3 percentage point. In the case of women, the corresponding values are 16.9 per cent and 8.5 per cent, a difference of nearly 8.5 percentage points.

Why is there such a big difference in the ratio for women? A clue lies in Statements 26 and 27 of the PLFS Annual Report, 2017-18. These two tabulations provide data on hours worked. Statement 26 shows that on an average women work for 10 hours less a week compared to men. And, Statement 27 shows that more women work less hours a day than men. 15.5 per cent of rural women and 9 per cent of urban women work less than 24 hours a week which translates to less than 3.4 hours a day. Only 5 per cent of rural men and 2 per cent of urban men work such few hours.

It is likely that such women, who work less than 3 hours a day, do not consider themselves to be employed and therefore do not report themselves to be employed, to CPHS. However, PLFS considers them to be employed because it satisfies their definition and their priority criterion. In CPHS, the respondent's view of her principal status matters. This possibly explains why the CPHS shows a lower employment rate and in particular, a lower female employment rate than the PLFS.