Unemployment in Kerala at the turn of the century : insights from CDS Gulf Migration Studies

This Working Paper is about the unemployment situation in Kerala. It is based on the findings of the two Gulf Migration Studies, Kerala Migration Study (KMS) and South Asia Migration Study (SMS), conducted by the authors at the Centre for Development Studies, Thiruvananthapuram, during the last five years. The paper gives measures of unemployment rates in the state in 1998 and 2003, examines their variation by geographic regions, such as districts and taluks, by demographic characteristics such as age, sex and marital status, by sociocultural variables such as education, religion and community, and by economic indicators of households such as remittances received, quality of housing, possession of consumer durables, etc. On the basis of the trends and differentials in the profile of the unemployed, the study provides a few insights, some quite unorthodox, on the factors associated with the increase in the unemployment rate in the state during 1998- 2003. As far as possible, all the assertions and conclusions are supported by factual data from the two surveys. Unemployment rates in Kerala, as estimated in KMS and SMS, were more or less of the same order of magnitude as those provided by National Sample Survey (NSS) and other studies. The rates were 19.2 in 2003 and 11.2 in 1998. They, however, varied considerably by socioeconomic factors. The rate was 34 percent of the labour force in Thiruvananthapuram district but only 10 percent in Idukki district; it was 41 percent among females but only 11 percent among males; 59 percent among unmarried females but only 2 percent among married males; 50 percent among persons under 25 years of age but only 6 percent among those above 30 years; 50 percent among persons with secondary education but only 1 percent among those who did not complete primary level of education; 29 percent among the Mar Thoma Syrian Christian community, but only 11 percent among the Scheduled Castes. A major point of interest of the Working Paper was the question: what caused the large increase (55 percent among males and 115 percent among females) in unemployment during 1998-2003? The paper identified four factors that could possibly be associated with the increase in unemployment in the state. They are - Influx of a large number of women into the labour force, - Aging of the labour force, - Large increase in the number of persons with secondary or higher levels of education, and - Emigration and inward remittances. The paper gives strong empirical support to the positive association between unemployment rate on the one side and education and emigration on the other. It also gives a list of taluks in which the unemployment rate was much higher than (or much lower than) the level expected on the basis of the above hypotheses. Detailed examination of the employment and other socio-economic situations in these deviant taluks could provide additional insight on the determinants of unemployment in Kerala. The paper concluded with the observation that unemployment in Kerala is much more a social problem than an economic problem. Five factors lead to this conclusion. First, nearly 70-75 percent of the unemployed in 1998 became employed within five years, the hard-core unemployment lasting more than 5 years being only about 5-6 percent. Second, there is no geographical area that remains a high unemployment area for longer periods of time. Third, the unemployment rate among persons 30 years of age or more was only about 6 percent. Fourth, many of the unemployed came from relatively well-to-do households living in "good or luxurious" houses furnished with expensive household durables. Fifth, the unemployed are rarely the breadwinners of the households concerned, but are mostly unmarried sons or daughters of the head, or married women whose husbands are the breadwinners. The paper offers little by way of new policies to reduce unemployment in the state except to stress the relevance of educational reforms. Although there is considerable scope for creating new jobs in the state, as most of the goods consumed in the state are produced outside the state, the nonresident Keralites are flush with money, and the labour force on the whole is academically "well educated", the problem of the Kerala worker's reluctance to do hard manual jobs and of the near "unemployability" of most of the educated youths in the state stand in the way. In terms of policies to reduce the unemployment rate in Kerala, educational reforms deserve top priority. This is not a finding of this study, but a conclusion that deserves reiteration. Key Words: International Migration, Remittances, Unemployment, Replacement Migration, Kerala JEL Classification: J21, J23