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Trade and labor demand in an emerging market economy: an analysis for Indian manufacturing during 1991-2010

Author

Listed:
  • Simontini Das

    (Rabindra Bharati University, India.)

  • Ajitava Raychaudhuri

    (Rabindra Bharati University, India.)

  • Saikat Sinha Roy

    (Jadavpur University, India.)

Abstract

The paper investigates into the impact of international trade on labor market in an emerging market economy. In specific, the paper estimates the impact of manufactured exports on demand for both production and non-production workers and employment elasticity for aggregate as well as disaggregated manufacturing in India during post reforms period. Econometric estimation is carried out for a panel data set comprising of fifteen disaggregated manufacturing industries for the period 1991 to 2010 using dynamic panel data estimation methods. The estimates show that exports have a positive impact on aggregate employment level and on employment elasticity for production as well as non-production workers in IndiaÕs aggregate manufacturing. However, the effect of trade on employment elasticity varies across industries. Employment elasticity increases in those industries, where the growth rate of real wage declines or labor market is relatively flexible due to high growth of contract labor during post reforms years.

Suggested Citation

  • Simontini Das & Ajitava Raychaudhuri & Saikat Sinha Roy, 2014. "Trade and labor demand in an emerging market economy: an analysis for Indian manufacturing during 1991-2010," Journal of Developing Areas, Tennessee State University, College of Business, vol. 48(3), pages 353-379, July-Sept.
    • Handle: RePEc:jda:journl:vol.48:year:2014:issue3:pp:353-379
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    Citations

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    Cited by:

    1. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Is there any relationship between Marginal Intra-Industry Trade and Employment Change? Evidence from Indian Industries," Working Papers 2044, Indian Institute of Foreign Trade.
    2. Sakshi Aggarwal & Debashis Chakraborty, 2020. "Labour Market Adjustment and Intra-Industry Trade: Empirical Results from Indian Manufacturing Sectors," Journal of South Asian Development, , vol. 15(2), pages 238-269, August.

    More about this item

    Keywords

    International Trade; Employment Elasticity; Dynamic Panel Data Analysis;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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