Job Growth in India Outpaces Quality as Informal Labor Persists

India's unemployment rate fell from 6.1 percent in 2017-18 to 3.2 percent in 2023-24 alongside an increase in female workforce participation. However, a recent analysis shows that this job growth has largely failed to ensure job security, workplace rights, or adequate social security for millions of workers.

Employment Quality

Researchers analyzed employment quality using two rounds of the Periodic Labour Force Survey and a multidimensional Decent Work Index. The overall index score rose from 0.247 to 0.302, showing slight progress driven by manufacturing and transport sectors. Yet, nearly 90 percent of India's workforce remains informally employed without written contracts, paid leave, provident fund benefits, or insurance coverage. Agriculture continues to be the lowest-quality employment sector, while construction and retail rely heavily on casual labor and subcontracting chains.

Inequality and Disparities

Labor market progress is deeply uneven across regions and social groups. States such as Goa, Kerala, Tamil Nadu, and Haryana perform better in decent-work creation, while Bihar, Jharkhand, and Uttar Pradesh lag behind. Furthermore, women from Scheduled Tribes and Other Backward Classes experienced a decline in decent-work outcomes between 2017-18 and 2023-24 even as outcomes for men improved, intensifying the labor market penalty for being both female and socially marginalized.

Policy and Future

Experts stress that poor-quality jobs hurt economic growth because unprotected workers spend and save less, leaving them vulnerable to shocks. The four Labour Codes introduced in 2025 aimed to simplify regulations, but implementation remains partial and inconsistent. Authors of the study suggest that policy must focus on extending social protection to all workers, linking business subsidies to mandatory labor rights, and addressing intersectional caste and gender disadvantages rather than only counting new jobs.

Context

Decent work is a core component of sustainable economic development and social stability worldwide. When an economy generates high numbers of informal jobs without formal protections, large segments of the population remain exposed to poverty despite steady headline GDP growth.