Employment Elasticity and Its Correlates

This chapter focuses on a wide range of issues which may constrain employment growth. We try, using the state-level panel data, to identify some of the important correlates of employment elasticity, employment growth and quality employment. The period under consideration is 1999–2000 through 2018–19. Findings suggest that the roots to growth with employment generation can be strengthened by subscribing to policies that promote the provisioning of physical, health and educational infrastructure and encourage the population to acquire better skill and make themselves employable. Though the relative size of the service sector outweighs that of the industry, it is pertinent that the strategy of industrialization is instrumental to creating productive employment opportunities. Higher levels of investment, particularly in the urban spaces, are expected to yield higher returns. Considering the findings pertaining to the employment growth rather than the employment elasticity, the role of development indicators and educational attainments is prominent. The instances of beneficial effects on employment growth have been witnessed at the sectoral level, gender-wise and also in terms of formal–informal decomposition with important policy implications. Finally, the quality employment responds positively to higher levels of education, various development indicators, export volumes and the labour market conditions being pro-employer.