An Urban Safety Net

Context: A new employment survey in the Delhi-NCR region, fielded by National Council of Applied Economic Research (NCAER) points to the unevenness of economic recovery and the continued vulnerability of specific populations.

Important observations from the survey

• Recovery in Employment: Comparing Worker-to-Population Ratio (WPR) of 2019 with 2020: 

• For men, the decline was only five percentage points in the third quarter as compared to a 26 % decline in the second quarter (onset of lockdown).
• For women, the decline was 16 percentage points in the second quarter while the decline was only two percentage points in the third quarter

• Self-employment has emerged as a protective force: It weathered the employment slowdown better than those engaged in salaried employment or those employed as casual labourers.

• In the third quarter of 2020, the self-employment levels had almost returned to its 2019 levels
• Comparing to 2019 levels, wage employment for men in the third quarter of 2020 is seven percentage points lower, and for women, it is two percentage points lower.

• Impact of lockdown was uneven: larger employment declines are observed in urban areas.

• Year-on-year WPR difference for urban men was ten percentage points in the third quarter while it was only two percentage points for rural men.

• The impact was more on individuals at the bottom of the income pyramid: 

• WPR dropped by 13 percentage points below its 2019 levels in the third quarter for urban men who were in the bottom three quintiles of the household asset ownership 
• While it was only eight percentage points below their 2019 levels in the third quarter for urban men in the top two quintiles

Conclusion: Since the urban poor is the most affected and in need of social safety, it is the time to think about an urban employment programme analogous to Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA).