Worker Population Ratio

The Worker Population Ratio (WPR) is an important indicator used to measure the extent of employment in an economy. It represents the proportion of employed persons (workers) in the total population. The ratio provides insights into how effectively a country or region is utilising its human resources for productive activities.
In simpler terms, WPR indicates what percentage of the total population is engaged in any economically productive activity, such as agriculture, industry, or services.

Definition

According to the National Statistical Office (NSO) and the Periodic Labour Force Survey (PLFS):

Worker Population Ratio (WPR) is defined as the percentage of employed persons (workers) in the total population.

It is one of the three key labour force indicators, along with the Labour Force Participation Rate (LFPR) and the Unemployment Rate (UR).

Formula

Worker Population Ratio (WPR)=(Number of Employed Persons (Workers)Total Population)×100\text{Worker Population Ratio (WPR)} = \left( \frac{\text{Number of Employed Persons (Workers)}}{\text{Total Population}} \right) \times 100Worker Population Ratio (WPR)=(Total PopulationNumber of Employed Persons (Workers)​)×100
Example:If the total population of a region is 1,00,000 and the number of employed persons is 40,000:
WPR=(40,0001,00,000)×100=40%\text{WPR} = \left( \frac{40,000}{1,00,000} \right) \times 100 = 40\%WPR=(1,00,00040,000​)×100=40%
This means that 40% of the population is engaged in some form of economic activity.

Interpretation

• High WPR: Indicates a high level of employment participation in the population.
• Low WPR: Suggests a large proportion of dependents (children, elderly, unemployed, or those outside the labour force).

WPR is affected by demographic factors (age structure), social norms (especially related to women’s work), economic conditions, and employment opportunities.

Types of WPR Based on Employment Status

The WPR can be calculated under different concepts of employment used in the Periodic Labour Force Survey (PLFS) and earlier National Sample Survey (NSS) frameworks:

1. Usual Status (Principal and Subsidiary) WPR (UPSS):
   • Based on employment over a reference period of one year.
   • Includes all persons who worked as principal or subsidiary workers during the year.
2. Current Weekly Status (CWS) WPR:
   • Based on employment during the last seven days preceding the survey.
   • A person is considered employed if they worked for at least one hour on any day during the week.
3. Current Daily Status (CDS) WPR:
   • Based on daily employment data for the seven days preceding the survey.
   • Reflects the average proportion of the population employed on a daily basis.

Worker Population Ratio by Sectors

Workers contributing to WPR are categorised into three broad sectors:

1. Primary Sector: Agriculture, forestry, fishing, and mining.
2. Secondary Sector: Manufacturing, construction, and utilities.
3. Tertiary Sector: Trade, transport, education, healthcare, and other services.

In India, a large share of workers are still engaged in the primary sector, although there has been a gradual shift towards manufacturing and services over time.

Factors Affecting WPR

1. Demographic Structure:
   • Population composition by age and gender influences the working population.
2. Economic Development:
   • A developed economy offers more employment opportunities, raising WPR.
3. Educational Levels:
   • Higher education may delay labour market entry, affecting WPR among youth.
4. Gender Norms:
   • Cultural and social factors often restrict women’s participation in paid work.
5. Rural-Urban Differences:
   • Rural areas generally show higher WPR due to the prevalence of family-based and self-employment activities.
6. Government Policies:
   • Employment schemes like MGNREGA and Skill India influence WPR, especially in rural regions.
7. Technological Change:
   • Mechanisation may reduce labour demand in some sectors, impacting WPR.

Importance of Worker Population Ratio

• Indicator of Labour Utilisation: Reflects how effectively an economy employs its population.
• Tool for Policy Planning: Helps in designing employment, education, and welfare policies.
• Comparison Across Regions: Facilitates state-wise, rural-urban, and gender-based comparisons.
• Measure of Economic Dependency: Inversely related to the dependency ratio—the higher the WPR, the lower the number of dependents.
• Monitoring Economic Growth: Helps evaluate whether economic expansion is accompanied by job creation.

Trends in Worker Population Ratio in India

• Rural vs Urban:
  • Rural areas generally have a higher WPR due to greater participation in agriculture and informal activities.
  • Urban WPR is lower, especially among women, due to limited job availability and higher educational enrolment.
• Gender Gap:
  • The WPR for males remains significantly higher than for females, although recent years have shown a gradual improvement in female participation.
• Recent Data (as per PLFS 2022–23):
  • Overall WPR (Usual Status): Around 52.9%.
  • Male WPR: Approximately 73.7%.
  • Female WPR: Around 34.7%, showing notable improvement compared to previous years.

These figures reflect gradual progress in employment levels, partly due to rural employment schemes, rising self-employment, and greater participation of women in non-farm activities.

Limitations of WPR

• Does Not Reflect Job Quality: High WPR may still coexist with underemployment or informal work.
• Excludes Unpaid Domestic Work: Especially underrepresents women’s unpaid economic contributions.
• Age Composition Influence: Countries with younger populations tend to have lower WPR due to more dependents.
• Seasonal Variation: Employment in sectors like agriculture may fluctuate across the year.

Relationship Between WPR, LFPR, and Unemployment Rate

The three major labour market indicators are interrelated:

• Labour Force Participation Rate (LFPR): Percentage of people working or seeking work.
• Worker Population Ratio (WPR): Percentage of people actually working.
• Unemployment Rate (UR): Percentage of people in the labour force who are unemployed.

WPR=LFPR×(1−UR)\text{WPR} = \text{LFPR} \times (1 – \text{UR})WPR=LFPR×(1−UR)
This relationship helps policymakers understand whether employment growth is keeping pace with labour force expansion.

Conclusion

The Worker Population Ratio (WPR) is a key measure of the employment situation in a country. It highlights the proportion of the total population engaged in productive work and provides insights into the structure and efficiency of the labour market.