How India affords a falling LPR

We find that the fall in LPR since 2016 has been accompanied with a fall in the proportion of households where more than one person is employed

There should be a limit to the rise in unemployment rate or the fall in labour participation rate (LPR). Sin­ce employment in India is largely informal in nature and wages are quite low, peo­ple cannot afford to remain unemployed or choose not to be employed by staying out of the labour market for long. Informal jobs imply no compulsory savings and low wages imply no practical savings. If people cannot save, then not working would imply that they will not be able to meet the minimum daily expenses required to keep body and soul together.

Only around 20 per cent