IDEAS home Printed from https://ideas.repec.org/a/wsi/jdexxx/v18y2013i04ns1084946713500283.html
   My bibliography  Save this article

Unorganized Sector In India: Employment Elasticity And Wage-Productivity Nexus

Author

Listed:
  • ARUP MITRA

    (Institute of Economic Growth, Delhi, India)

  • AVIRAL PANDEY

    (Division of Economics, A.N. Sinha Institute of Social Studies, Patna, India)

Abstract

In India the formal, or organized, sector is not able to generate employment opportunities for the unskilled or semi-skilled workers on a large scale, forcing them to get residually absorbed in the unorganized sector. At the same time, the unorganized sector is believed to have work consignments from the organized sector and this ancillarization process is contributing to employment creation. In the backdrop of these views the present study, using the unit level data of the National Sample Survey (NSS, 2010-11), makes an attempt to estimate the employment elasticity and wage-productivity nexus in the unorganized sector. Although the employment function estimated in the paper suggests employment can be raised through wage reduction, it can affect the wellbeing of the workers because the wage rate in the unorganized sector is already very low. Further, subcontracting or ancillarization does not seem to be contributing to employment generation in unorganized manufacturing or trade related activities. However, in the services sector it shows a positive impact. The equation representing determinants of wages shows units with assets are better-off compared to those that do not have them. This has an important policy implication, suggesting that through asset creation, government may bring in improvements in livelihood of the unorganized sector enterprises.

Suggested Citation

  • Arup Mitra & Aviral Pandey, 2013. "Unorganized Sector In India: Employment Elasticity And Wage-Productivity Nexus," Journal of Developmental Entrepreneurship (JDE), World Scientific Publishing Co. Pte. Ltd., vol. 18(04), pages 1-19.
    • Handle: RePEc:wsi:jdexxx:v:18:y:2013:i:04:n:s1084946713500283
    DOI: 10.1142/S1084946713500283
    as

    Download full text from publisher

    File URL: http://www.worldscientific.com/doi/abs/10.1142/S1084946713500283
    Download Restriction: Access to full text is restricted to subscribers
    File URL: https://libkey.io/10.1142/S1084946713500283?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. Martha Alter Chen, 2007. "Rethinking the Informal Economy: Linkages with the Formal Economy and the Formal Regulatory Environment," Working Papers 46, United Nations, Department of Economics and Social Affairs.
    2. Seema Joshi, 2009. "IT and ITES as an Engine of Growth : An Exploration into the Indian Experience," Development Economics Working Papers 22926, East Asian Bureau of Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Djidonou, Gbenoukpo Robert & Foster-McGregor, Neil, 2022. "Stagnant manufacturing growth in India: The role of the informal economy," Structural Change and Economic Dynamics, Elsevier, vol. 63(C), pages 528-543.

    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. Colin C. Williams, 2023. "A Modern Guide to the Informal Economy," Books, Edward Elgar Publishing, number 18668.
    2. Meagher, Kate, 2019. "Working in chains: African informal workers and global value chains," LSE Research Online Documents on Economics 91590, London School of Economics and Political Science, LSE Library.
    3. Friedrich Schneider & Mangirdas Morkunas & Erika Quendler, 2021. "Measuring the Immeasurable: The Evolution of the Size of Informal Economy in the Agricultural Sector in the EU-15 up to 2019," CESifo Working Paper Series 8937, CESifo.
    4. Mansour Omeira & Simel Esim & Sufyan Alissa, 2008. "Labor Governance and Economic Reform in the Middle East and North Africa: Lessons from Nordic Countries," Working Papers 436, Economic Research Forum, revised 09 Jan 2008.
    5. Adekunle Moruf Alabi & Mubarak Olatunji Lasisi & Maryam Abimbola Azeez, 2020. "The evolution of informal land use in a Nigerian market," Environment and Planning B, , vol. 47(5), pages 745-758, June.
    6. Aysit Tansel & Elif Oznur Acar, 2016. "The Formal/Informal Employment Earnings Gap: Evidence from Turkey," Research on Economic Inequality, in: Inequality after the 20th Century: Papers from the Sixth ECINEQ Meeting, volume 24, pages 121-154, Emerald Group Publishing Limited.
    7. Luebker, Malte., 2008. "Employment, unemployment and informality in Zimbabwe : concepts and data for coherent policy-making," ILO Working Papers 994206943402676, International Labour Organization.
    8. Tansel, Aysit & Kan, Elif Oznur, 2011. "Labor mobility across the formal/informal divide in Turkey: evidence from individual level data," MPRA Paper 35672, University Library of Munich, Germany.
    9. Gundogan, Naci & Bicerli, Mustafa Kemal, 2009. "Urbanization and Labor Market Informality in Developing Countries," MPRA Paper 18247, University Library of Munich, Germany.
    10. Kan, Elif Oznur & Tansel, Aysit, 2014. "Defining and Measuring Informality in the Turkish Labor Market," MPRA Paper 57739, University Library of Munich, Germany.
    11. Maria Ferreira, 2016. "Informal versus precarious work in Colombia: Concept and operationalization," Progress in Development Studies, , vol. 16(2), pages 140-158, April.
    12. Chan-Yuan Wong, 2016. "Evolutionary targeting for inclusive development," Journal of Evolutionary Economics, Springer, vol. 26(2), pages 291-316, May.
    13. Joseph M. Cheer & Stephen Pratt & Denis Tolkach & Anthony Bailey & Semisi Taumoepeau & Apisalome Movono, 2018. "Tourism in Pacific island countries: A status quo round‐up," Asia and the Pacific Policy Studies, Wiley Blackwell, vol. 5(3), pages 442-461, September.
    14. Oksana Yaskal & Ihor Yaskal & Mariana Kolosinska & Svitlana Boyda, 2021. "The Informal Employment – Factors and Public Policies for Its Limitation," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 2, pages 56-73.
    15. Chatterjee, Sidharta, 2021. "On the Theory of Knowledge Resource Inequality: Role of Knowledge Capital in Social Transformation," MPRA Paper 105221, University Library of Munich, Germany.
    16. Pasovic Edin & Efendic Adnan S., 2018. "Informal Economy in Bosnia and Herzegovina – An Empirical Investigation," South East European Journal of Economics and Business, Sciendo, vol. 13(2), pages 112-125, December.
    17. William Amos Pallangyo, 2021. "The informal sector and the safety of female traders in Tanzania: A reflection of practices, policies, and legislation," WIDER Working Paper Series wp-2021-160, World Institute for Development Economic Research (UNU-WIDER).
    18. Peter D. Little & Waktole Tiki & Dejene Negassa Debsu, 2015. "Formal or Informal, Legal or Illegal: The Ambiguous Nature of Cross-border Livestock Trade in the Horn of Africa," Journal of Borderlands Studies, Taylor & Francis Journals, vol. 30(3), pages 405-421, September.
    19. Njoya, Loudi & Ngouhouo, Ibrahim & Asongu, Simplice & Schneider, Friedrich, 2022. "The role of economic prosperity on informality in Africa: evidence of corruption thresholds from PSTR," MPRA Paper 119059, University Library of Munich, Germany.
    20. Ana Isabel Moreno-Monroy & Gustavo Adolfo García Cruz, 2016. "Intra-Metropolitan Agglomeration of Formal and Informal Manufacturing Activity: Evidence from Cali, Colombia," Tijdschrift voor Economische en Sociale Geografie, Royal Dutch Geographical Society KNAG, vol. 107(4), pages 389-406, September.

    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:wsi:jdexxx:v:18:y:2013:i:04:n:s1084946713500283. 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: Tai Tone Lim (email available below). General contact details of provider: http://www.worldscinet.com/jde/jde.shtml .

    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.