Tracking labour market quality through a multidimensional Decent Work Index: evidence from Punjab and Haryana

This paper develops a composite Decent Work Index (DWI) to evaluate labour market quality in Punjab and Haryana over the period 1999–2022. The study advances methodologically through the construction of a longitudinal, state-level index based on geometric mean aggregation, which minimises compensability across dimensions and strengthens institutional comparability over time. Using nine indicators aligned with the four pillars of decent work defined by the International Labour Organization, productive employment, social protection, workers’ rights, and social dialogue, the index captures multidimensional labour market performance. Results show that Punjab’s DWI declined from 0.605 in Phase I to 0.337 in Phase III, while Haryana increased from 0.360 to 0.373 over the same period, driven primarily by employment and wage improvements. Equal weighting is adopted as a normative benchmark in the absence of empirically validated welfare trade-offs across pillars, consistent with composite index literature. Robustness is validated using Leave-One-Out Sensitivity Analysis (LOOSA), confirming that interstate differences are not driven by any single indicator. The COVID-19 pandemic exposed higher labour market volatility in Haryana, whereas Punjab exhibited lower short-term DWI volatility during 2020–2021 compared to Haryana. The study provides a transparent and replicable framework for state-level labour market evaluation and offers evidence-based insights aligned with Sustainable Development Goal 8.