IDEAS home Printed from https://ideas.repec.org/a/spr/ijlaec/v61y2018i2d10.1007_s41027-018-0130-7.html
   My bibliography  Save this article

Technological Change, Skill Supply and Wage Distribution: Comparison of High-Technology and Low-Technology Industries in India

Author

Listed:
  • Hansa Jain

    (Sardar Patel Institute of Economic and Social Research)

Abstract

The technological inflows on the one hand and the increase in skill supply on the other have influenced not only the production structure of Indian manufacturing industries, but also the distribution of wages among the skilled and unskilled workers. The present study examines the wage disparity scenario in high-technology and low-technology industries in India. With the help of industry-level panel data from 2000–2001 to 2015–2016, the study finds the important role of skill intensity in determining wage disparity between and within the groups of skilled and unskilled workers. Skill has greater concentration in high-technology industries. Wage disparity between the skilled and unskilled workers and also within the skilled workers is high in high-technology industries as compared to low-technology industries. Skill intensity increases wage disparity in the beginning, but later on due to trickle-down effect, the trend is reversed. The study suggests that enhancement of skills through expansion of higher education and training will improve both the observed and unobserved abilities. This will increase productivity on the one hand and decrease wage disparity on the other. There is also a concern for the promotion of research and development activities to develop skill further.

Suggested Citation

  • Hansa Jain, 2018. "Technological Change, Skill Supply and Wage Distribution: Comparison of High-Technology and Low-Technology Industries in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 299-320, June.
    • Handle: RePEc:spr:ijlaec:v:61:y:2018:i:2:d:10.1007_s41027-018-0130-7
    DOI: 10.1007/s41027-018-0130-7
    as

    Download full text from publisher

    File URL: http://link.springer.com/10.1007/s41027-018-0130-7
    File Function: Abstract
    Download Restriction: Access to the full text of the articles in this series is restricted.
    File URL: https://libkey.io/10.1007/s41027-018-0130-7?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Nahuis, Richard & Smulders, Sjak, 2002. "The Skill Premium, Technological Change and Appropriability," Journal of Economic Growth, Springer, vol. 7(2), pages 137-156, June.
    2. James Heckman, 2011. "Policies to foster human capital," Voprosy obrazovaniya / Educational Studies Moscow, National Research University Higher School of Economics, issue 3, pages 73-137.
    3. Oded Galor & Omer Moav, 2000. "Ability-Biased Technological Transition, Wage Inequality, and Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 115(2), pages 469-497.
    4. Eva Moreno-Galbis & Francois-Charles Wolff, 2009. "Evidence on new technologies and wage inequality in France," Applied Economics, Taylor & Francis Journals, vol. 43(7), pages 855-872.
    5. repec:dau:papers:123456789/10093 is not listed on IDEAS
    6. Chris Forman & Avi Goldfarb & Shane Greenstein, 2012. "The Internet and Local Wages: A Puzzle," American Economic Review, American Economic Association, vol. 102(1), pages 556-575, February.
    7. Hartmut Egger & Volker Grossmann, 2005. "Non-Routine Tasks, Restructuring of Firms, and Wage Inequality Within and Between Skill-Groups," Journal of Economics, Springer, vol. 86(3), pages 197-228, December.
    8. Francesco Caselli, 1999. "Technological Revolutions," American Economic Review, American Economic Association, vol. 89(1), pages 78-102, March.
    9. Melissa Osborne & Herbert Gintis & Samuel Bowles, 2001. "The Determinants of Earnings: A Behavioral Approach," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1137-1176, December.
    10. Eve Caroli & John Van Reenen, 2001. "Skill-Biased Organizational Change? Evidence from A Panel of British and French Establishments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(4), pages 1449-1492.
    11. Philippe Aghion & Xavier Jaravel, 2015. "Knowledge Spillovers, Innovation and Growth," Economic Journal, Royal Economic Society, vol. 0(583), pages 533-573, March.
    12. Juhn, Chinhui & Murphy, Kevin M & Pierce, Brooks, 1993. "Wage Inequality and the Rise in Returns to Skill," Journal of Political Economy, University of Chicago Press, vol. 101(3), pages 410-442, June.
    13. Vinod Mishra & Russell Smyth, 2014. "Technological Change and Wages in China: Evidence from Matched Employer–Employee Data," Review of Development Economics, Wiley Blackwell, vol. 18(1), pages 123-138, February.
    14. Kang-Shik Choi & Jinook Jeong, 2007. "Does unmeasured ability explain the wage premium associated with technological change?: Quantile regression analysis," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1163-1171.
    15. Árpád Ábrahám, 2008. "Earnings Inequality and Skill-Biased Technological Change with Endogenous Choice of Education," Journal of the European Economic Association, MIT Press, vol. 6(2-3), pages 695-704, 04-05.
    16. Ann P. Bartel & Nachum Sicherman, 1999. "Technological Change and Wages: An Interindustry Analysis," Journal of Political Economy, University of Chicago Press, vol. 107(2), pages 285-325, April.
    17. Gould, Eric D & Moav, Omer & Weinberg, Bruce A, 2001. "Precautionary Demand for Education, Inequality, and Technological Progress," Journal of Economic Growth, Springer, vol. 6(4), pages 285-315, December.
    18. Christopher R. Taber, 2001. "The Rising College Premium in the Eighties: Return to College or Return to Unobserved Ability?," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 68(3), pages 665-691.
    19. Kang-Shik Choi & Jinook Jeong, 2005. "Technological change and wage premium in a small open economy: the case of Korea," Applied Economics, Taylor & Francis Journals, vol. 37(1), pages 119-131.
    20. Eric D. Gould, 2002. "Rising Wage Inequality, Comparative Advantage, and the Growing Importance of General Skills in the United States," Journal of Labor Economics, University of Chicago Press, vol. 20(1), pages 105-147, January.
    21. Per Krusell & Lee E. Ohanian & JosÈ-Victor RÌos-Rull & Giovanni L. Violante, 2000. "Capital-Skill Complementarity and Inequality: A Macroeconomic Analysis," Econometrica, Econometric Society, vol. 68(5), pages 1029-1054, September.
    22. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Aghion, Philippe & Howitt, Peter & Violante, Giovanni L, 2002. "General Purpose Technology and Wage Inequality," Journal of Economic Growth, Springer, vol. 7(4), pages 315-345, December.
    2. David B. Audretsch & Mark Sanders, 2007. "Globalization and the Rise of the Entrepreneurial Economy," Jena Economics Research Papers 2007-003, Friedrich-Schiller-University Jena.
    3. Maoz, Yishay D. & Moav, Omer, 2004. "Social Stratification, Capital–Skill Complementarity, And The Nonmonotonic Evolution Of The Education Premium," Macroeconomic Dynamics, Cambridge University Press, vol. 8(3), pages 295-309, June.
    4. Borghans, Lex & ter Weel, Bas, 2007. "The diffusion of computers and the distribution of wages," European Economic Review, Elsevier, vol. 51(3), pages 715-748, April.
    5. Fatih Guvenen & Burhanettin Kuruscu, 2012. "Understanding The Evolution Of The Us Wage Distribution: A Theoretical Analysis," Journal of the European Economic Association, European Economic Association, vol. 10(3), pages 482-517, May.
    6. Fatih Guvenen & Burhanettin Kuruscu, 2006. "Ben-Porath meets skill-biased technical change: a theoretical analysis of rising inequality," Discussion Paper / Institute for Empirical Macroeconomics 144, Federal Reserve Bank of Minneapolis.
    7. Kang-Shik Choi & Jinook Jeong, 2007. "Does unmeasured ability explain the wage premium associated with technological change?: Quantile regression analysis," Applied Economics, Taylor & Francis Journals, vol. 39(9), pages 1163-1171.
    8. Lance Lochner & Youngki Shin, 2014. "Understanding Earnings Dynamics: Identifying and Estimating the Changing Roles of Unobserved Ability, Permanent and Transitory Shocks," NBER Working Papers 20068, National Bureau of Economic Research, Inc.
    9. Egger, Hartmut & Grossmann, Volker, 2004. "Noncognitive Abilities and Within-Group Wage Inequality," IZA Discussion Papers 1024, Institute of Labor Economics (IZA).
    10. Patricia Crifo & Etienne Lehmann, 2001. "Why the Kuznets Curve Will Always Reverse," Post-Print halshs-00150773, HAL.
    11. Yoshiaki Azuma & Herschel I. Grossman, 2003. "Educational Inequality," LABOUR, CEIS, vol. 17(3), pages 317-335, September.
    12. Patricia Crifo & Etienne Lehmann, 2001. "Why will the Kuznets Curve always reverse ?," Post-Print halshs-00179987, HAL.
    13. Hollanders, Hugo & ter Weel, Bas, 2002. "Technology, knowledge spillovers and changes in employment structure: evidence from six OECD countries," Labour Economics, Elsevier, vol. 9(5), pages 579-599, November.
    14. David H. Autor & Frank Levy & Richard J. Murnane, 2003. "The Skill Content of Recent Technological Change: An Empirical Exploration," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 118(4), pages 1279-1333.
    15. Daron Acemoglu, 2002. "Technical Change, Inequality, and the Labor Market," Journal of Economic Literature, American Economic Association, vol. 40(1), pages 7-72, March.
    16. Gould, Eric D., 2005. "Inequality and ability," Labour Economics, Elsevier, vol. 12(2), pages 169-189, April.
    17. Adriaan Zon & Roberto Antonietti, 2016. "Education and training in a model of endogenous growth with creative wear-and-tear," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 33(1), pages 35-62, April.
    18. Pablo Acosta, 2001. "Los determinantes de la desigualdad en los ingresos laborales: El rol de las nuevas tecnologías y la apertura comercial," IIE, Working Papers 034, IIE, Universidad Nacional de La Plata.
    19. Yoshiaki Azuma & Herschel Grossman, 2001. "Educational Inequality," Working Papers 2001-03, Brown University, Department of Economics.
    20. Baris Kaymak, 2009. "Ability Bias and the Rising Education Premium in the United States: A Cohort-Based Analysis," Journal of Human Capital, University of Chicago Press, vol. 3(3), pages 224-267.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spr:ijlaec:v:61:y:2018:i:2:d:10.1007_s41027-018-0130-7. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.