Working in a Joint Family

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Working in a joint family

Published: Mint dated 10th May 2010

This week we take a

look at F3--households

whose chief wage

earner is a school-

educated skilledworker who is married,

has children, and lives

in a joint family

Indicus Consumer Segment




This week, the urban consumer segment in the spotlight is F3, households whose

chief wage earner is a school-educated skilled worker who is married, has children,

and lives in a joint family. It is contrasted with last week¶s segment E5, which

comprises chief wage earners with similar educational and life-stage profiles, but areskilled workers who live in nuclear families or businessmen in joint or nuclear

families.

The family set up that distinguishes skilled workers in F3 and E5 segments is the

characteristic that defines the income, expenditure and asset ownership patterns in

these two segments.

F2




F3 households are large in size²81% are of five members or more and

31% have more than two children. More than half the households have

two or more earning members, joint families also comprise relatives and

friends who have come to the city to earn. There is a significantgeographical variation here²districts in the north in general have larger

household sizes than in the south.

In fact, urban districts where F3 households have more than seven

members in their households are Kanpur Nagar, Alwar, Udham Singh

Nagar, Gwalior, Purbi Singbhum, Ambala, Indore, Bhavnagar, Allahabad

and Jabalpur.

The F3 consumer segment comprises 2.5% of the total urbanhouseholds, 11th in size with more than 1.8 million households. However,

with a large household size supporting more people, this segment ranks

seventh largest in population among all urban consumer segments.

More than half the chief wage earners in this segment have completed

higher secondary school and there is a relatively larger proportion of

chief wage earners who are in regular salaried jobs in this segment,

compared to the E5, which even includes businessmen.




The sector that offers maximum scope for those with low education is that

of wholesale and retail trade; 27% of the chief wage earners work in this

sector. Manufacturing with 23%, transport with 13% and public

administration with 10% are the other top-ranking sectors. As before, those with low skills work at the lowest rung of government

jobs, but in service sectors there is significant potential to rise higher as

experience becomes key to earning. Though household incomes are

relatively low²the median household income is Rs136,000 and there are

almost 80% of the households earning less than Rs3 lakh²2.6% of

households in this segment do earn more than Rs10 lakh a year.

Clearly, even with low education levels and skills, there is still considerable

scope for making it big in the cities, as these numbers show.In fact, 63% of these families stay in their own homes, a higher proportion

than in the E5 segment. These consumer segments have been created

due to the distinctive patterns seen in asset-income expenditure profiles of

the groups. One of the reasons behind higher home ownership in F3

compared to E5 is that in joint families that characterize F3 households,

there is significant family support and it is easier to raise money.

Moreover, the E5 segment includes businessmen and it is well known that

small businesses run on their own resources, with little access to bankcredit or government support of any kind. So in the E5 segment,

businessmen who stay in joint families would be using such family

resources support also to invest in their own businesses; home ownership

waits for later years when savings build up.




Looking at consumer segments through this prism, other

insights come into light. For instance, financial inclusion

that will bring such E5 segment businessmen into the

formal credit system will have a tremendous positive spin-

off, releasing resources that households can use for the

family, maybe be able to own homes at an earlier age.Maharashtra, Tamil Nadu and Uttar Pradesh rank the top

three states in the F3 segment with more than 150,000

households.

Districts with the highest population in the F3 segment are

obviously the big cities of the country²Mumbai, Delhi,

Bangalore, Thane, Pune, Ahmedabad, Chennai, Kolkata,

North 24 Parganas and Surat.

Documents

Working in a Joint Family