In the earlier story, we looked at the broad trends in EPF numbers with respect to new subscribers, exits & re-joinees. We looked at the age-wise trends in detail in this story. Data indicates that there is a significant fall in the number of ‘New EPF Subscribers’ in the below 25 age group for 2020-21.
In the earlier story, we analysed the trends in EPF payroll data for 2020-21 and the comparative trends for the last three years. It was observed that there has been a declining trend in the number of new subscribers to EPF and those that have exited. At the same time, there is an increase in the number of re-joinees. In this story, we take a look at Age-wise trends in the EPF numbers which could offer more insights.
Fall in EPF Net Payroll in ‘Under 26’ age groups, while it increased in higher age bands
We have earlier observed that the Net EPF Payroll for the year 2020-21 is 77.08 lakhs, slightly less than the previous year (78.58 lakhs). The trend though is not consistent across the various age bands.
The three age bands ‘Under 26 years’ of age i.e., less than 18, 18-21 & 22-25 as categorized by the EPFO report, have reported a fall in net EPF numbers for 2020-21 compared to 2019-20.
Within them, the decline is more prominent in the younger age band. Furthermore, the decline in Net EPF payroll numbers in ‘Less than 18’ age band is a continuation of the trend observed even earlier. On the other hand, the trend is opposite among the higher age-bands. While the growth rate has slowed down compared to the earlier years, there is still an increase in the net EPF numbers.
In spite of a fall during Lockdown, the Net Payroll numbers increased in later months
The lower EPF Net payroll numbers during the lockdown have contributed significantly to the lower numbers for the year 2020-21. In the earlier story, we had observed that the monthly numbers have shown a recovery in the later months of the year as the country gradually opened up. This trend was also observed in different age bands. However, difference in trends among the age-bands can be observed, that have influenced the overall trend in the net EPF payroll in 2020-21.
The negative net figures that were reported in April & May’2020 were due to the negative numbers in mostly the higher age groups. Here is a snapshot of the broad trends in age-band wise trends of net EPF payroll.
- Despite lower numbers, the youngest age-band of ‘less than 18’ has not reported a negative payroll in April & May’2020. It has to be noted that the numbers in this age band are usually low and fewer exits may have contributed to this trend.
- The ‘18-21’ age band reported a net negative payroll in April’20 but a recovery was observed in the ensuing months.
- The rest of the age-bands reported a higher incidence of Net negative Payroll during the lockdown months. In most of the following months, these age-bands had significantly higher Net Payroll numbers.
- The recovery in ‘More-than 35’ age band has been slower compared to others. Negative payroll was reported even during June’2020. There was a spike in September’2020, being the last month of second quarter and the month when most lockdown measures were relaxed.
The lower growth in the youngest age band, and the higher recovery in higher age bands corroborates the trend observed in our earlier story that there is a fall in the new-joinees to EPF, while there is an increase in the re-joinees.
Typically, younger age groups are among the new joiners to EPF payroll, as they start with formal employment after their education. The higher age groups on the other hand contribute significantly to the re-joinees as they switch to new jobs, re-join the workforce after a break or loss of employment.
Declining trend in new joinees across age-bands with an increase in re-joinees in higher age-bands
The trend in number of new joinees indicate that there is a decline not only during 2020-21, that is impacted by pandemic but also even prior to that.
New Joinees: The new joinees to EPF is a broad indicator of the employment creation in the country because most of those who take up formal employment for the first time and are eligible for EPF are enrolled as new joinees. Age-wise data indicates that the decline in the number of new joinees is across the age groups. In fact, the fall in numbers across the age-groups is seen even prior to 2020-21 in line with the overall trend of new joinees to EPF, as highlighted earlier.
Exits: In case of those who have exited EPF during 2020-21, there is a decline in the numbers across all the age-bands with the exception of ‘35 and above’ age band. The trend is a continuation from the previous year where a decline is observed across the age-groups. Declining numbers for exit could indicate stability in the current employment. However, an increase in the number of people that have exited EPF in the ‘35 above’ age group during 2020-21, points towards job losses in case of experienced employees.
Analysis of the trend through 2020-21 shows that a higher number of exits were during the first quarter, which gradually improved over the following three quarters. The number of exits has been lower in the last two months of the year.
Re-Joinees: The overall trend for re-joinees is an increasing one, but this trend is not observed in the younger age-bands. Both in the case of ‘less than 18’ and ‘18-21’ age bands, the number of re-joinees in 2020-21 is less than that of 2019-20. The decline in 2020-21 for these age groups is a reversal of sorts since there was an increase in the number of re-joinees in 2019-20.
In the rest of the age groups, there is an increase in the number of re-joinees in EPF in 2020-21 compared to previous years. However, the growth in the number of re-joinees is lower than in 2019-20. Especially in the age groups of 22-35, there is a significant fall in the growth of re-joinees in 2020-21.
EPF data shows impact of COVID-19 on employment
In the earlier story, we had highlighted that the decline in the number of new EPF subscribers points towards a slowdown in the creation of new job opportunities. However, this is not specific to 2020-21 but a trend observed in the last few years.
The age-wise information further corroborates this development. Comparatively higher volume of new members is among the age bands between 18-25 since that’s the age when most find formal employment for the first time. A decline in these numbers is a direct indicator of the new job opportunities.
The increase in the number of exits in ‘age 35 & above’ with a fall in the lower age groups, indicates the higher vulnerability of the older age-groups to loss of employment in a pandemic year. The lower proportionate increase in the re-joinees in the higher age groups in 2020-21 points towards the larger churn in the employment scene during & post lockdown.
Featured Image: EPF Data for 2020-21
