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Jobless growth in India: an investigation

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  • Sheba Tejani

Abstract

This paper investigates the relationship between output growth and employment growth in India for the period 1978–2010 at the aggregate and sectoral levels. Using a Kaldorian framework of endogenous productivity growth, we find that Kaldor–Verdoorn effects in the economy have become more predominant over time, especially in the post-reform (1994–2010) period. Our estimated Kaldor–Verdoorn coefficients, measured as the employment elasticity of output growth, for both formal sector and total employment have dropped dramatically over time, suggesting that India has leapfrogged into a high-productivity regime without the broad-based expansion of labour-intensive production that has been characteristic of fast-growing economies in East Asia. We examine some explanations for why these Kaldor–Verdoorn effects have become pronounced over time and are not convinced that wage pressure has been one of the reasons. A shift in the composition of demand towards higher-productivity sectors, however, does appear to be an important part of the explanation. We also find mixed evidence that forces of international competition have generated pressures to adopt more capital-intensive techniques of production.

Suggested Citation

  • Sheba Tejani, 2016. "Jobless growth in India: an investigation," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 40(3), pages 843-870.
    • Handle: RePEc:oup:cambje:v:40:y:2016:i:3:p:843-870.
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    File URL: http://hdl.handle.net/10.1093/cje/bev025
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    Cited by:

    1. Majid, H. & Siegmann, K.A., 2017. "Has growth been good for women’s employment in Pakistan?," ISS Working Papers - General Series 630, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    2. Satinder Singh & Jatinder Singh, 2022. "Employment Scenario in Indian Punjab: Some Disquieting Features," Journal of Development Policy and Practice, , vol. 7(2), pages 158-179, July.
    3. Ashmita Gupta, 2021. "Effect of Trade Liberalization on Gender Inequality: The Case of India," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 69(4), pages 682-720, December.
    4. Jacob, Tinu Iype & Paul, Sunil, 2024. "Labour income share, market power and automation: Evidence from an emerging economy," Structural Change and Economic Dynamics, Elsevier, vol. 69(C), pages 37-45.
    5. Siegmann, K.A. & Ivosevic, P. & Visser, O., 2021. "Working like machines: Exploring effects of technological change on migrant labour in Dutch horticulture," ISS Working Papers - General Series 691, International Institute of Social Studies of Erasmus University Rotterdam (ISS), The Hague.
    6. Karin Astrid Siegmann & Hadia Majid, 2021. "Empowering Growth in Pakistan?," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 64(2), pages 309-331, June.
    7. Sri Rajitha Tattikota & Naveen Srinivasan, 2021. "Integration of Econometric Models and Machine Learning- Study on US Inflation and Unemployment," Working Papers 2021-207, Madras School of Economics,Chennai,India.

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