Finally, there also seems to be a clear ordering in terms of who moves into what. Among permanent salaried workers, the predominant transition is into self-employment, whereas, for temporary salaried workers, the larger share moves into daily wage work. Given that daily wage work is the least paid occupation, this suggests that even in transitions, initial hierarchies matter in determining the kind of transition.
Notably, the degree of stability and transition also varies by region, that is, rural and urban (data not shown). While the percentage of those who continued in self-employment was 80 per cent in rural areas, the percentage was 65 per cent in urban areas. These percentages in the non-pandemic baseline period were 83 and 72 per cent. In other words, not only is urban self-employment relatively more unstable, this instability (and the difference between rural and urban areas) increased during the pandemic period - from a difference of 8 percentage points between rural and urban areas in the non-pandemic period to 15 percentage point.
It is likely that agriculture absorbed much of the transitioning workforce, and the absence of such a fallback sector is reflected in the higher volatility in urban areas. We examine this more closely when looking at sectoral transitions.
Salaried work, unlike self-employment, saw more flux in rural areas than in urban areas. While salaried work was equally stable in rural and urban areas in the baseline period, during the pandemic period, only 41 per cent of rural permanent salaried (compared to 51 per cent of urban permanent salaried) were able to retain their employment arrangement. Furthermore, the proportion transitioning into casual wage employment from salaried employment is also higher in rural areas than in urban areas.
workforce. In terms of exit, temporary salaried work saw the highest share of workers exiting with 21 per cent exiting the workforce. Thirteen per cent of permanent salaried workers and about 16 per cent of daily wage workers exited. Self-employment saw the least share of workers exiting (11 per cent). For all employment types, the share exiting during this period was higher than in the baseline.
In sum, on one hand, several of those who were employed prior to the lockdown have moved to more precarious forms of employment and towards sink sectors. There was also an exodus of workers, particularly from salaried wage work. On the other hand, many individuals who were not employed in the period prior to the lockdown entered into the workforce - suggesting a replacement of the worker who was earlier employed. This indicates a high degree of churning both across employment arrangements and towards and out of the workforce. In the next section, we see to what extent these transitions varied by gender, caste and religious identity of the worker.
4.2.2 / Social identities and
4. Informalisation and earnings losses
to only 11 per cent of men. This is seen clearly in the ‘alluvial graphs’ shown in Figure 4.3 (men and women). Notice the difference between the ‘out of workforce’ category. Women from all employment categories exited the workforce in far higher proportions than men.
Worryingly, in proportionate terms, the exit was highest in the case of salaried women workers (56 per cent). For men, the level of exit was much lower with the highest exit being seen among temporary salaried workers (16 per cent). In other employment arrangements too, women exited in larger shares compared to men. Forty four per cent of self- employed women had left the workforce, compared to 10 per cent of men (Table 4.2). In general, the share of women exiting from any arrangement is
at least twice their share in that arrangement in the pre-pandemic period. In fact, in the case of permanent salaried and self-employed work, the share of women exiting was between three to four times their share in those categories. In contrast for men, there is no such over-representation in the share exiting any arrangement. The garment sector for instance, one of the major sources of regular salaried employment for women, saw a massive contraction. According to a survey by the Garment and Textiles Workers’ Union (GATWU) and Alternative Law Forum (ALF), even in factories that have opened, workers were asked to resign and often coerced to resign with threats of non- settlement of dues. Factories have also used other tactics such as transferring workers to distant units without providing transport facilities.6
Figure 4.3 : Men moved into informal employment while women moved out of the workforce during the pandemic
Men
Women
Sources and notes: Authors' calculations based on CMIE-CPHS. Data is for the months of September, October, November, December (wave 3) of 2019 and 2020. Numbers on the left indicate percentage share of that employment arrangement in total workforce in 2019. Numbers on the right indicate percentage share in total working age population in 2020.
Key
DW : Casual/
Daily-wage worker;
SE : Self- employed;
TS : Temporary salaried;
PS : Permanent salaried OW : Out of workforce
Casual/
daily wage worker Self- employed Temporary salaried Permanent salaried Overall (2020)
Casual/daily wage worker
49.9
13.3
18.9
9.1
23
Self- employed
30.3
68.4
27.3
32.5
50 Table 4.2 :
Transitions in employment arrangements for men and women, 2019-2020
Sources and notes: Authors’ calculations based on CMIE-CPHS. Data is for the months of September,October,November,December (wave 3) of 2019 and 2020. See Appendix
Temporary salaried
5.0
3.7
28.6
7.6
7
Permanent salaried
3.1
5.1
8.9
42.6
9
Overall (2019)
27
53
9
11
100.0
Employment arrangement in 2019
Employment arrangement in 2020
Legend :
High Medium Low
Men Out of
Workforce 11.6
9.5
16.3
8.2
11
Casual/
daily wage worker Self- employed Temporary salaried Permanent salaried Overall (2020)
Casual/daily wage worker
38.2
11.9
9.2
2.7
21
Self- employed
11.0
41.0
5.6
4.1
21
Temporary salaried
2.9
1.6
23.9
5.1
5
Permanent salaried
1.0
1.5
5.0
31.2
5
Overall (2019)
40
36
12
12
100.0
Employment arrangement in 2019
Employment arrangement in 2020
Women Out of Workforce
46.9
44.1
56.4
57.0
48
4. Informalisation and earnings losses
Second, the extent and the nature of entry differed substantially between men and women. As we saw in Chapter Three, the female workforce saw far more churn with nearly half of the 2020 workforce being women who were not previously employed in 2019. Not only did the female workforce see a higher level of entry, the kinds of work women were entering into were different in comparison to men. Half of the men entered into self employment (Figure 4.4). A smaller share, 28 per cent, entered as daily wage workers. For women, on the other hand, more entered as daily wage workers (43 per cent) and a relatively smaller share as self-employed (37 per cent).
The third, and final observation is about the men and women who stayed employed between the two periods. The diagonal elements in Table 4.3 indicate that women, in general, have higher ‘stickiness’, remaining in the same employment arrangement over the year. Except for the self-employed, where the share who remain are similar between men and women, for all other employment arrangements, women are more likely to stay as is, compared
to men. At first glance this would suggest that women are more ‘secure’ in their given employment arrangement. But, when we place this in context of the larger exit of women from the workforce seen earlier, it is apparent that the stickiness we see for women comes from them not having other fallback options for employment, and instead leaving the workforce entirely. So, when we restrict our analysis to just women in the workforce, the higher diagonal elements are indicative not of women being unaffected in terms of transitions, but rather that when women are forced to transition, it is more likely to be a transition out of work, rather than into fallback employment options.
When women do transition across employment arrangements, they have fewer and worse fallback options. For example, 21 per cent of self-employed women moved to more precarious daily wage work. The corresponding number for men was only 15 per cent. Similarly, among temporary salaried work which was another employment category that saw a lot of flux, for men, the movement was towards self employment, whereas for women, this movement was into daily wage work.
Sources and notes: Authors' calculations based on CMIE-CPHS. Data is for the months of September, October, November, December (wave 3) of 2019 and 2020. See Appendix Section 2 for details.
Figure 4.4 : Women more likely to enter as casual workers, men as self- employed
37 7
43
54 7
28
13 12
Casual/daily wage worker Self-employed
Temporary salaried Permanent salaried
Casual/daily wage worker
56.5 14.7 22.6 10.0
Self- employed
34.3 75.6 32.7 35.4 Table 4.3 :
When women remained in employment, they tended to experience less
transitions than men
Sources and notes: Authors’ calculations based on CMIE-CPHS. Data is for the months of September,October,November,December (wave 3) of 2019 and 2020. See Appendix Section 2 for details.
Temporary salaried
5.6 4.1 34.1
8.3
Permanent salaried
3.5 5.6 10.6 46.4
Employment arrangement in 2019
Employment arrangement in 2020
Legend :
High Medium Low
Male
Casual/daily wage worker Self-employed
Temporary salaried Permanent salaried
Casual/daily wage worker
71.9 21.3 21 6.4
Self- employed
20.7 73.2 12.8 9.4
Temporary salaried
5.5 2.9 54.8
11.8
Permanent salaried
1.9 2.6 11.4 72.5 Female
It should be noted that men tend to have better fallback options even during a normal year and women tend to transition out of employment more frequently than men even during normal times (Appendix 1 Table 3). But the gender differential has been particularly pronounced during the pandemic.
Religion & Caste
We now come to the differences in the kind of transitions observed among Hindu and Muslim workers. During the pandemic year, far fewer Muslims were able to maintain their permanent salaried status. Forty-eight per cent of Hindus who were permanent salaried remained so compared to only 33 per cent Muslims (Appendix 1 Table 4).
34 per cent and 9 per cent respectively. Neither of these — higher transition out of permanent salaried work and higher influx into daily wage work among Muslims compared to Hindus — is observed in the baseline year (Appendix 1 Table 4).
With respect to caste, a significant difference is observed in the kind of fallback sectors that are accessible to different caste groups. Casual wage work is much more likely to act as fallback for less privileged caste groups than for the general category groups. Only between 3 to 15 per cent of general category groups transitioned to daily wage work from various other categories. On the other hand, anywhere between 18 to 30 per cent
4. Informalisation and earnings losses
wage work. In contrast, about 18 per cent of SC or ST workers had moved to daily wage work.
Self-employment, which is relatively better than daily wage work in terms of the associated earnings, is more likely to act as fallback for general category workers. For example, 43, 38, and 36 per cent of upper caste workers from daily-wage, permanent salaried and temporary salaried work arrangements transitioned to self-employment, the corresponding percentages for SC workers was 23, 23, and 21 per cent, respectively. While 82 per cent of general category self-employed workers before the pandemic continued to be in this arrangement post the pandemic, the arrangement was much less stable for SCs and STs, with only 60 and 75 per cent continuing to be in this arrangement. We also see that the differences with other castes are less pronounced during the baseline period (Appendix 1 Table 5). In other words, the pandemic widened the gulf in quality of work between caste groups.