QUALITY OF EMPLOYMENT AND SKILL DEVELOPMENT IN INDIA

Abstract

The quality of employment has emerged as a central concern in labour market analysis, particularly in developing economies such as India, where a large share of the workforce remains engaged in low-quality, informal and precarious work. While aggregate employment figures have improved over the decades, they mask significant disparities in job quality across dimensions such as social-security coverage, wage adequacy, regularity of employment and working conditions. Simultaneously, skill development has been recognised as a critical policy instrument for upgrading the quality of labour supply and enhancing workers' capacity to access and retain good-quality employment. This dissertation examines the relationship between skill development and quality of employment in India using unit-level data from the Periodic Labour Force Survey (PLFS) 2022–23. Quality of employment is defined as a binary outcome, distinguishing high-quality from low-quality employment on the basis of the nature of the employment contract, social-security entitlements and regularity of work. A probit regression model is employed as the primary estimation strategy, given the binary nature of the dependent variable, with robust standard errors throughout. The empirical analysis incorporates key socioeconomic determinants including training type, education level, gender, work experience and its quadratic term, location and caste category. The findings reveal that formal skill training and higher education are both strongly associated with a significantly higher probability of accessing high-quality employment. Gender-based disparities are pronounced, with female workers facing substantially lower probabilities of high-quality employment than their male counterparts. Urban location is strongly associated with better employment quality, reflecting the structural concentration of formal-sector jobs in urban areas, while caste-based differences, though statistically significant, are relatively modest in magnitude. The results underscore the importance of investing in skill-development infrastructure, particularly formal vocational training, as a lever for improving employment quality. Policy recommendations include strengthening the coverage and vi quality of formal training programmes, addressing gender gaps in labour-market access, and enhancing the reach of formal-sector employment in rural areas. The findings are associational rather than causal, given the cross-sectional design, and this limitation is acknowledged throughout.