Study on Interrelationship between Economic Growth and Employment

INTRODUCTION

Unemployment means wastages of available resources in a country, which can be used for producing goods and services in an economy. Jobs are the cornerstone of economic and social development. Indeed, development happens through jobs. People work their way out of poverty and hardship through better livelihoods. Economies grow as people get better at what they do, as they move from farms to firms, and as more productive jobs are created and less productive ones disappear. Societies flourish as jobs bring together people from different ethnic and social backgrounds and nurture a sense of opportunity. Jobs are thus transformational—they can transform what we earn, what we do, and even who we are (World Development Report, 2013:02). Today, jobs are a critical concern across the globe. Some 200 million people including 75 million under the age of 25 are unemployed. As per the world development report 2013, worldwide, more than 3 billion people have jobs, but the nature of their jobs varies greatly. Some 1.65 billion have regular wages or salaries. Another 1.5 billion work in farming and small household enterprises, or in casual or seasonal day labour, while 90 million people are working abroad; 115 million children are working in hazardous conditions and 21 million people are victims of forced labour, while 621 million youth are neither working nor studying. Looking forward, over the next 15 years an additional 600 million new jobs will be needed to absorb burgeoning working-age populations, mainly in Asia and SubSaharan Africa. There has been a general notion since long that the traditional agriculture provides employment to many more persons than is necessary to produce a given level of output. The notion was very strong during the fifties and sixties particularly in India, and it was regarded as an almost established fact that the agricultural sector of developing country like India suffers from large scale disguised unemployment and/ or underemployment, which clearly indicates that the marginal productivity of labour in agriculture is zero or nearly zero. It has been further stated that the problem of disguised unemployment and/ or underemployment in the traditional agricultural sector is the problem of those landless agricultural labourers and small cultivators who are working on small plots, contributing virtually negligible or nothing to output

• Nature of Rural Unemployment • The nature of unemployment in India differs from the one that prevails in industrially • Advanced countries. Lord Keynes attributes the cause of unemployment to a deficiency of • Effective demand. But in India unemployment is mainly due to the shortage of capital, the • Poor exploitation of natural resources and inadequate employment opportunities. This leads • To large number of rural people to be unemployed. In Indian villages more than 80 per cent of labourers are engaged in agricultural activities. Most of the rural labourers engaged in non-farm sector work in cottage industries as iron-smith, carpenter etc., and in different types of services. It is estimated that more than 3 two third of rural workers are self-employed; just one-third of the workers work for others. Problem of involuntary unemployment is not much in rural areas (Jain, 2006-07:189). Unemployment and the related socio-economic challenges are deemed a major issue confronted by both industrialised and emerging countries. In order to eradicate this occurrence, policymakers have paid considerable importance to generating work openings and re-operating the idle units. There are a variety of explanations behind this phenomenon, especially in developing countries, due to the lack of economic growth followed by rapid population growth, the inability to mobilise domestic savings to fund required expenditures, the decrease in economic activity due to contraction, changes in technology, changes in market demand, on-qualifying employment that are not c Unemployment is typically the product of a labour market imbalance between demand and availability. It is a generally held belief that work is directly influenced by the GDP growth rate. If it raises, then work will grow and the rate of unemployment will decrease. The presence of a trade-off between economic development and the changing rates of unemployment in the country is verified by several reports. The main aim of this paper is to analyse the relationship in MENA countries between unemployment and GDP growth. The report is organised into three sections: section (1) deals with the evaluation of literature; section (2) addresses methods and data; while section (3) introduces the interpretation of findings, conclusions and recommendations. be classified into three categories: Open unemployment: Open unemployment refers to that situation wherein although the worker is willing to work and he has necessary ability to work yet he does not get work. This type of unemployment is found among agricultural labourers. Agriculture in the Indian context is a seasonal occupation and there is always a heavy demand for labour at the time of sowing, wedding and harvesting whereas in slack season, demand for labour falls considerably. Seasonal Unemployment: The period of seasonal unemployment in India varies from state to state, depending upon the methods of farming, nature of soil and possibility of multiple cropping. In off season agriculture farmers remain unemployed for four or six months in a year. Because of illiteracy, poverty and poor health they are unable to avail some alternative employment opportunity during this period. Concealed or Disguised Unemployment: In concealed unemployment, it is difficult to identify an unemployed person. This type of unemployment is also named disguised unemployment. According to the U. N. Committee of Experts,―The disguisedly unemployed are those persons who work on their own account and who are too numerous relatively to resources with which they work, so that if a number of them were withdrawn to work in other sectors of the economy, the total output of the sector from which they were withdrawn would not be diminished even though no significant reorganization occurred in this sector.‖ According to Prof. Nurkse, the marginal productivity of such workers is zero or even negative. In the absence of irrigation facilities, such people look busy in working on their own land, but in fact, they only relieve other members of their family from work. They contribute nothing to agricultural production. Disguised unemployment in rural India is 25 per cent to 30 per cent. It is mostly prevalent among marginal and small farmers. Educated Rural Unemployment: The problem of unemployment among the educated rural youth is another major area of concern. The spread of education has created many unemployed young persons who are in search of jobs. But there is no job in the labour market for them. This sort of unemployment leads to very tragic consequences. It breeds frustration among some and discontent among others.

Rural problems particularly of educated unemployment are one of the burning problems that India has been facing since along. Its magnitude has increased in the post reform period. There are wide inter-state variations regarding magnitude of unemployment in India. It is the lopsided educational system, lack of industrialization in rural areas, which are often

labour. For example, combined harvesters and tractors, in themselves, have reduced the demand for labour. All these factors have led to an increase in the magnitude of rural unemployment. The unemployment rate for youngsters aged between 15 and 29 has increased marginally in India between 2009-10 and 2011-12. About 285 million Indians fall in the 15- 29 age groups, which is about 9 per cent of India's population of 1.2 billion people. In India the unemployment is higher among the youth and the educated who are looking for better quality jobs. The unemployment among the age group 15–29 years for both males and females and in urban and rural areas is significantly higher (Government of India, a: 132) than the average level of unemployment of all persons as shown in Figure 1. Unemployment in India is structural in nature. In other words, productive capacity is inadequate to create a sufficient number of jobs. This is a chronic phenomenon.

Rapid urbanization and globalisation is changing the composition of employment. More than half the population in developing countries is expected to be living in cities and towns before 2020 (Lipton, 2005). As a result, the growth of the non-agricultural labour force will vastly exceed the growth of the agricultural labour force. However, in India, most people are still engaged in agriculture and live in rural areas, so, increasing productivity in agriculture is a priority. India has a large number of unemployed people. This is true of the rural as well as urban fields. According to the report, Rural Agricultural Commission, Indian Agriculturalists are unemployed for about 6 months in a year. There are various factors responsible for this situation. The factors that responsible for unemployment in the rural areas are: • Excessive increase in population or population explosion; • Limited land and great pressure on land; • Vagaries of monsoon; • Use of traditional methods of agriculture; • Lack of education and ignorance about scientific and modern means of agriculture; • Lack of adequate means of agriculture; • Poverty; • Faulty system of education; • Lack of occupational mobility; • Disappearance of traditional occupation; • Lack of employment policy; • Small holdings and fragmentation of land; • Lack of adequate credit facility to agriculture.

Open and disguised unemployment in rural areas leads to wastage of human resources. In the absence of industrial development in rural areas more and more people fall back on agricultural activities, which increases pressure on land; ultimately results in division of agricultural land. This adversely affects productivity of agriculture. The unemployed persons in rural areas are unproductive consumers. They merely consume without any contribution to production. In the process, they eat away resources, which would have been mobilized for capital formation in rural sector. Absence of employment opportunities in rural sector forces people to migrate to cities in search of jobs. Migratory population crowds the cities. Slums grow rapidly. Environment gets polluted and cities become dens of vices. Another consequence of rising unemployment is increase in the number of crimes in the rural sector. In the past rural life was mostly peaceful but along with the increase in unemployment, criminal activities have registered a sharp increase and rural peaceful atmosphere has been considerably destroyed. Cases of drug abuse and drug pedalling unknown in the past have also increased. This has further aggravated rural unrest. Unemployment affects the social status, personal life and sentiments of the unemployed person. Loss of social status tends to isolate the unemployed person from the existing contacts. Prolonged unemployment makes unemployed persons either a delinquent or an

relationships. This acts upon the morale and social life of the individual, family and community in a very subtle way.

1. To assess the changes in structure of rural employment. 2. To understand the interrelationship between economic growth and employment/ unemployment.

Muzumdar (2014) measured disguised unemployment in Bombay-Karnataka reglon Rejecting the time norm as a measure of unemployment in agriculture, he relied on the desire and willingness of the cultivators for additional work He determined the size of the standard holding for each sample village which is defined as the area of land which is sufficient to absorb, in given condition of technique and type of farming, the labour of all average farm family working with a pair of bullocks. The standard holdtng was determined on the basis of the responses given by households with regard to their ability to cultivate additional land Comparing the standard holding with the actual distribution, he found that 7 1 4 per cent of the holdings were smaller than the standard unlt and hence affected by disguised unemployment 52 7 per cent had less than half of the standard unit On the basis of this, he estiinated that 52 per cent of the cultivators had about half of the normal employment implying that 26 per cent were surplus and the remaining 19 per cent had three-fourths of normal employment implying that about five per cent were surplus In this way, disguised unemployment was estimated at 3 1 per cent of the total farm workers. Mehra (2012) Worked out State-wise. estimates of surplus labour in agriculture on the difference between actual work-force, on different size groups of holdings (taken from 1961 Census) and the labourers required at the peak of agricultural operations This estimate thus arrived was treated on the maximal estimate. The percentage of surplus was calculated by tak~ng the mean of the maximal and minimal estimates Her estimates for all India was 70 1 per cent which revealed wide inter-state variations in the incidence of unemployment. Sanghvi (2013) estimated surplus labour, using data collected from two villages in 1956-57 in the East Khandesh District in Mysore State The supply of labour during peak harvesting season was estimated surplus came to 47 20 per cent of the labour force in agriculture Mehra sanghvi and Rudra (2014) measured surplus labour in agriculture They fbund the difference between supply of labour and demand for labour during the peak agricultural season and designated it as surplus labour Hence, th~s surplus may be visible or disguised Thls does not reveal seasonal unemployment This method does not explicitly allow for any change in the techniques of cultivation and organisation of farm structure Uppal (2015) survey data in 1956-57 and shared a higher incidence of 8 4 per cent. Disguised une~nployment is measured as the difference between the number of labour days being put in various agricultural operations and the number of labour days actually required on the farms for the exlsting total agricultural output. Papola and mistral (2016) study on Some Aspects of Rural Industrialization observed that the emphasis on traditional rural industries as the central element in the strategy for rural industrial sation is based on a number of economic as well as social considerations Uslng available traditional skills and requiring little capital, they employment to the rural households, without involving any dislocation and migration costs They use more labour per unit of capital and output as compared to modern industry , and their operations can be adjusted to suit the fluctuations in labour requirements of agricultural sector Another presumably favorable feature of these Industries is that they provide self-employment which, according to a view point, is the most desirable form of employment as it is free from exploitation which is a characteristic feature of wage labour It has also been argued that "the principle of self-employment is at least important to successful democracy as that of self-government". Pushpa Sundar (2016) study on female employment revealed that in most cultures tnen are expected to seek employment whatever the level of family income inight be Field studies show that women's participation in the labour force depends not only on an economic dec~sion of the woman herself, but to a great extent on her husband's or family's income and employment status and extra-economic considerations. Thus, both Dandekar's and Jian's evaluations of the Maharashtra Employment Guarantee Scheme (EGS) show that women are employed as EGS workers in greater proportion to the number of job-seekers than men in rural areas, because men work on better-paying jobs elsewhere, leaving EGS work to their women-folk There is a feeling that EGS work is easier Also men do not want to lose their contacts in the rural

wage rates were revised on EGS schemes in October 1978, the number of male workers on EGS has risen Incidentally, since the EGS pays equal wage rates for male and female labour and since wages paid depend on productivity of labour and since separate figures are available for male and female wages paid, the EGS offers valuable evidence for definitive studies of male / female productivity by operation. Sivarman (2012) study on rural employment revealed that "agricultural labour, marginal farmers and village artisans, even if fully employed throughout the year, do not earn enough to enable the family to cross the poverty-line Then merely talking of employlnent and not trying to tackle lne basic problem of sufficiently remunerative employment leads to misleading statistics" Our whole strategy of attack on employment /poverty is by ensuring greater productivity per unit of productive unit whether land, water or human being This is necessitated because of the basic fact that fill employment in the rural sector has not given an Income which will put the family above the poverty-line. Unless we tackle simultaneously the provision of employment and the problem of removing poverty, our planning will remain an exercise in statistical futility. Baleshwar Ram (2014) study on rural reemployment observed that unemployment particularly in niral areas is the burning question for the whole nation Rural youth instead of taking to their own occupations run towards cities and there they have to face many difficulties It will be a help to ease down the problem, if they are engaged in petty occupations like rural and cottage industries in the vlllage itself "The Government has started various programmers and in addition to these programmer of development, many other programmer already under preparation and hence the things are sure to look upon in the near future. Asthana (2015) in study on a strategy to redress unemployment and poverty in rural areas felt that economic development in the first three decades of planning although brought about a perceptible Increase in the average per capita income, it has not been possible to make a major dent on poverty and unemployment on account of inadequate growth rate of the economy), uneven distribution of income and high rate of population growth A lasting solution to these problems can be found only within the frame of a rapid and employment-oriented economic growth Suitable measures are required to be evolved in a co-ordinate way particularly for the benefit of weaker sections. countries, the analysis defined successful variables to evaluate unemployment, gross domestic product, by examining the literature. From World Bank data bases, the variables were retrieved. As in other time series studies, panel data analysis variables that simultaneously process both time and cross-section analysis need to be fixed to eliminate incorrect relationships between the variables. The research utilises basic linear regression.

The mean values, standard deviations and skewness of GDP (annual) in each nation are shown in Table ( 1). It is noted that during the time (1990-2016), Iraq had the highest GDP (12.82), followed by Lebanon (6.48), then Qatar (6.36), while Algeria was the nation with the lowest GDP during this era (3.05). The average (annual) GDP of the countries included in this analysis was tracked (5.11). The last column in the table displays the GDP vector skewing values listed for each region. It was found that all the skewness values listed are assumed to be similar to the usual distribution of data as the appropriate values are commonly agreed if the other studies support skewness values if they vary between-3) (and (+ 3) if they vary between-1) (and (+ 1).

The mean values, standard deviations and skewedness of unemployment (percentage of labour) in each nation are described in Table (2). It is noted that during the time (1990-2016), Mauritania had the highest unemployment (29.40), followed by Algeria (17.85) and Libya (17.69), while Qatar had the lowest unemployment during this era (0.54). In the countries participating in this analysis , the total unemployment (percentage of labour) being measured was (10.63). The last column of the table shows the skewness of the unemployment variable values listed for each region. It was found that all the skewness values listed are assumed to be similar to the usual distribution of data as the appropriate values are commonly agreed if the other studies support skewness values if they vary between-3) (and (+ 3) if they vary between-1) (and (+ 1).

The effect values considered by GDP on unemployment in each nation of the countries Republic of Egypt where the impact value represented by the β coefficient was-0.747), (in the Republic of Jordan (0.501) and the United Arab Picture-0.136). The findings revealed that, according to the ANOVA-related significance values and (F) findings which were > 0.05 as shown in the graph, the other countries did not have an effect of GDP on unemployment.

The effect values considered by GDP on unemployment in all countries as seen in Table (4) = 0.05), indicating no major intervention. The significance amount of F was greater than (the effect on total GDP (annual) was observed reflecting all the countries participating in the unemployment analysis in all the countries estimated from the number of workers in those countries). It is considered that the effect amount is very minimal-0.009). This importance means that there could be other causes other than GDP that influence unemployment.

The employment challenges as reflected above needs to be addressed so as to meet the faster and inclusive growth objective of the XII Five Year Plan. Agriculture cannot be expected to provide more jobs. Manufacturing must provide a large portion of the additional employment opportunities required for India‘s increasing number of job seekers (Government of India, b: 54). The Micro, Small and Medium Enterprises (MSME) sector has emerged as a highly vibrant and dynamic sector of the Indian economy over the last few decades. It is estimated that this sector contributes about 45 per cent of manufacturing output and 40 per cent of total exports of the country and employs about 69 million persons in over 29 million units throughout the country. Within the MSME Sector there is a significant concentration of Micro Enterprises, both in terms of working enterprises and employment. There are over 6,000 products ranging from traditional to high-tech items manufactured by the MSMEs. The sector also covers the enterprises established in khadi and village industries and coir sector (Government of India, b: 54. These MSME must be encouraged to establish in rural areas. Almost half of all workers in developing countries are engaged in small-scale farming or self-employment, jobs that typically do not come with a steady pay check and benefits. The problem for most poor people in these countries is not the lack

for themselves and their children, and at times they are working in unsafe conditions and without the protection of their basic rights. Unemployment and the related socio-economic challenges are deemed a major issue confronted by both industrialised and emerging countries. In order to eradicate this occurrence, policymakers have paid considerable importance to generating work openings and re-operating the idle units. -- The main objective of this paper is to analyse the relationship between unemployment in MENA countries and GDP growth. The report is organised into three sections: section (1) deals with the evaluation of literature; section (2) addresses methods and data; while section (3) introduces the interpretation of findings, conclusions and recommendations. -- The findings showed that in all = 0.05) the effect values listed by GDP on unemployment suggested that no countries are concerned. The significance level of (F) was higher than (significant effect on gross GDP (annual) was observed for all the countries included in the unemployment analysis in all the countries estimated from the amount of workers in those countries. It is considered that the effect amount is very minimal-0.009). This value means that other variables other than GDP will influence unemployment.

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Assistant Professor, Department of Economics, Government Women Post-Graduate College, Kandhla, Shamli, Uttar Pradesh skgdckota@gmail.com