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Destruction or Polarization: Estimating the Impact of Technology on Jobs in Indian Manufacturing

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  • Pankaj Vashisht

    (Indian Council for Research on International Economic Relations (ICRIER))

Abstract

Indian manufacturers have invested significantly in technological upgradation since the opening up of Indian economy to foreign trade and technology in the mid-1980s. In this paper, we examine the impact of technology on employment and skill demand within Indian manufacturing sector. Estimating a dynamic labour demand equation, we find that despite reducing the required labour per unit of output, technology has not reduced the aggregate employment in Indian manufacturing sector. However, qualitative effect of technology on labour demand has been very significant. Our results show that adoption of new technology has increased the demand for high-skilled workers at the cost of intermediary skills, leading to the polarization of manufacturing jobs. It suggests that perhaps technology has reduced the routine-task content of manufacturing jobs in India.

Suggested Citation

  • Pankaj Vashisht, 2018. "Destruction or Polarization: Estimating the Impact of Technology on Jobs in Indian Manufacturing," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 227-250, June.
    • Handle: RePEc:spr:ijlaec:v:61:y:2018:i:2:d:10.1007_s41027-018-0127-2
    DOI: 10.1007/s41027-018-0127-2
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    Cited by:

    1. Pankaj Vashisht & Nisha Rani, 0. "Automation and the Future of Garment Sector Jobs in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 0, pages 1-22.
    2. Jain Ritika, 2021. "Information and Communication Technology Adoption and the Demand for Female Labor: The Case of Indian Industry," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 21(2), pages 695-722, April.
    3. Pankaj Vashisht & Nisha Rani, 2020. "Automation and the Future of Garment Sector Jobs in India," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 225-246, June.
    4. Chandan Sharma & Ritesh Kumar Mishra, 2023. "Imports, technology, and employment: Job creation or creative destruction," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 44(1), pages 152-170, January.

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    More about this item

    Keywords

    Technology; Employment; Labour demand; Skill;
    All these keywords.

    JEL classification:

    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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