Cyclical asymmetries and short-run relation between employment and output: the case of organised manufacturing in India

Using time series data from 1990–91 to 2011–12 and panel-data at 4-digit groups of NIC for the period 2008–09 to 2011–12 from the Annual Survey of Industries, this paper examines the argument that fall in employment is deeper in recession than the rise during boom, while fall and rise in output are of same intensity during recession and boom respectively. The result shows that the fall in both output and employment in Organized Manufacturing in India was sharper in downturns than their rise in upturns. Moreover, the decline in output decreases employment more than the employment created by a similar rise in output. For contract workers, the decline in jobs is even sharper in downturns than in upturns. During upturns, existing workers and skilled employees are used more intensively, and more jobs are created for skilled employees.