“Adult
education and composition of labour supply in India”
Citation: Bhakta, R. and A. Ganesh-Kumar
(2017). “Adult education and composition of labour supply in India”. In S.
Mahendra Dev (Ed.) India Development Report–2017, Oxford University Press, New
Delhi.
Abstract: The linkage between adult education
(AE) and the skill level of labour force is well recognized as a crucial factor
determining the overall economic performance of a country. However, the impact
of progress in AE on the labour supply especially in terms of the composition
of labour supply by education levels, is not well
understood. We addresses this gap in the literature in
this chapter. Towards this, we first takes stock of the trends and determinants
of the progress in AE made so far in terms of three indicators of education
attainment, viz., adult literacy rate, percentage of adult population that has
completed higher education, and average years of schooling. The analysis here
makes use of the information on education attainment of individual members of
households contained in the quinquennial rounds of the National Sample Survey
Organisation (NSSO) on Employment-Unemployment spanning the period 1999-2000 to
2011-12. We then review the literature on the determinants of adult education
attainment and the role of public expenditure in this regard. Next, we examine
the trends in the composition of labour supply in terms of their levels of
education attainment and their sector of employment. Three types of labour in
terms of their education levels are considered here, viz. (i)
illiterate & primary schooled; (ii) secondary-schooled; and (iii) graduates
& above. We then model the linkage between adult education attainment and
the composition of labour supply by education levels using the econometric
relationships on the determinants of adult education attainment estimated by
Bhakta (2015). Using this we project the expected future trends in the
composition of labour supply by education levels up to the year 2025-26. The
projections are made under several alternative assumptions on the trends in
public expenditure on education and its sub-components. These projections show
that (i) the percentage of high-schooled and
graduates & above in the labour force rise in all scenarios; (ii) the
illiterate & primary schooled labour force shrinks in absolute size; and
(iii) increasing public expenditure on education, higher education in
particular, does help in accelerating the supply of high-schooled and graduates
& above labour, though the effect is not very dramatic. These expected
future trends could have serious implications for the relative wage rates of
the three types of labour by education levels, with its attendant impacts on
the major sectors that employ them.