The Missing Middle
AbstractThough recent economic growth in India has increased productivity and living standards significantly, the need for more growth and more reform remains. Rapid growth of unskilled labor-intensive manufacturing combined with growth of productivity in agriculture is necessary to enable a more inclusive growth that raises living standards in rural areas and in non-agricultural employment of relatively unskilled labor. Indias comparative advantage in services does not preclude the need for a rapid-manufacturing growth phase of development due to the service sectors low contribution to output and its demand for educated and skilled, as opposed to unskilled, workers. The failure of manufacturing output and employment to grow more rapidly can be attributed to (1) regulations governing enterprises in the private sector and (2) regulations covering conditions of employment of labor. Reducing the barriers to entry of unskilled labor into manufacturing and relaxing some of the most restrictive labor laws would increase prospects for even faster growth than current high rates.
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Bibliographic InfoPaper provided by East Asian Bureau of Economic Research in its series Macroeconomics Working Papers with number 22171.
Date of creation: Jan 2009
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India; economic growth; Labour Regulations;
Other versions of this item:
- K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gaurav Datt & Martin Ravallion, 2002.
"Is India's Economic Growth Leaving the Poor Behind?,"
Journal of Economic Perspectives, American Economic Association,
American Economic Association, vol. 16(3), pages 89-108, Summer.
- Datt, Gaurav & Ravallion, Martin, 2002. "Is India's economic growth leaving the poor behind?," Policy Research Working Paper Series, The World Bank 2846, The World Bank.
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