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Critical Topics and Their Significance for the UPSC CSE Examination on February 19, 2025

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Slight dip in unemployment rate in urban areas

For Preliminary Examination:  Unemployment, Periodic Labour Force Survey (PLFS)

For Mains Examination: GS III - Economy

Context:

The unemployment rate in urban areas of the country was 6.4% for the period of October to December in 2024 for persons of age 15 and above, says the Periodic Labour Force Survey (PLFS) released by the Statistics and Programme Implementation Ministry here on Tuesday

Read about:

Periodic Labour Force Survey (PLFS)

What is Unemployment?

Key takeaways:

• The Periodic Labour Force Survey (PLFS), published by the Ministry of Statistics and Programme Implementation on Tuesday, reported that the unemployment rate in urban areas for individuals aged 15 and above stood at 6.4% from October to December 2024.
• Breaking it down by gender, the unemployment rate was 5.8% for men and 8.1% for women. Comparatively, the same period in 2023 saw an unemployment rate of 6.5%, while in the previous quarter (July–September 2024), it was also 6.4%. The unemployment rate among women in the corresponding quarter of 2023 was slightly higher at 8.6%.
• Among states, Himachal Pradesh recorded the highest unemployment rate at 10.4%, while Gujarat had the lowest at 3%. The female unemployment rate was also highest in Himachal Pradesh at 24%, whereas Delhi had the lowest at 1.3%.
• According to the PLFS, the unemployment rate is measured as the proportion of unemployed individuals in the labour force based on the Current Weekly Status (CWS), which considers employment or unemployment on an average weekly basis.
• The Labour Force Participation Rate (LFPR), which reflects the percentage of the population engaged in the labour force, stood at 39.6% across all age groups, marking a slight increase from 39.2% in the same quarter of the previous year.
• The LFPR for women saw a marginal rise to 20% from 19.9% a year earlier but declined compared to the last quarter’s 20.3%. Bihar had the lowest LFPR, with an overall rate of 30.7% and 9.9% for women.
• The survey, conducted among 1,70,487 individuals across 45,074 households, also highlighted an increase in the Worker Population Ratio (WPR) for urban residents aged 15 and above.
• The WPR rose from 46.6% in the October–December 2023 period to 47.2% during the same period in 2024. For men in urban areas, it increased from 69.8% to 70.9% over the same timeframe.
• Employment status was categorized into three broad groups: self-employed individuals, regular wage/salaried employees, and casual labourers. Among these, 39.9% were self-employed, 49.4% held regular jobs, and 10.7% were casual workers. Within the self-employed category, there were two sub-groups: own-account workers/employers and unpaid helpers in family enterprises.
• Sector-wise, 5.5% of workers were engaged in agriculture, 31.8% in secondary industries such as mining, and 62.7% in the tertiary sector, which encompasses services

 Types of Unemployment

Unemployment can be categorized into several types based on its causes a