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Estimating Labour Quality Index for India

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  • Ravindra H. Dholakia

    (Indian Institute of Management Ahmedabad)

Abstract

Present paper provides a detailed critique of the traditional methodology of taking wage differential as equal to the differential of marginal productivity of labour and proposes to replace it by the differential of average productivity of labour types. The purpose in this paper is not to provide a concrete estimate of the labour quality index, but to discuss possibility of following an alternative method and expand the scope of measurement from the traditional age–sex–education classification to a wider range including some directly non-quantifiable labour qualities. The traditional method and the previous efforts made in India ignored classifications of workers based on the urban–rural residence, organized–unorganized sectors, public versus private sector employment, self-employed versus hired workers versus casual employees, and health and nutritional status. If all these qualitative aspects are properly considered, we can get a reasonably accurate marginal contribution of formal education, urbanization, privatization, self-employment and health and nutrition status of workers to the economic growth.

Suggested Citation

  • Ravindra H. Dholakia, 2018. "Estimating Labour Quality Index for India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(1), pages 67-85, March.
    • Handle: RePEc:spr:ijlaec:v:61:y:2018:i:1:d:10.1007_s41027-018-0120-9
    DOI: 10.1007/s41027-018-0120-9
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    References listed on IDEAS

    as
    1. Dholakia Bakul H & Dholakia Archana R, 1975. "Empirical Test of the Marginal Productivity Theory of Wages: The Case of Indian Industries," IIMA Working Papers WP1975-09-01_00157, Indian Institute of Management Ahmedabad, Research and Publication Department.
    2. Mogens Fosgerau & Svend E. Hougaard Jensen & Anders Sørensen, 2002. "Measuring Educational Heterogeneity And Labor Quality: A Note," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 48(2), pages 261-269, June.
    3. repec:bla:revinw:v:48:y:2002:i:2:p:261-69 is not listed on IDEAS
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