Labour Use and Its Adjustment in Indian Manufacturing Industries
AbstractThis study provides an empirical investigation of the adjustment process of labour in Indian manufacturing industries, which evolved through structural transformation in the era of globalization. The analysis is based on a dynamic model applied to a panel of 22 two-digit manufacturing industries for the time period of 22 years covering 1980/81 to 2001/02. We assume that as competition increases industries adjust their employment to a desired level which is both industry and time specific. The results indicate that the manufacturing sector has shown a considerable dynamism in adjusting its workforce. The long run labour demand responds greatest to the output, followed by capital and least by wages. It is observed that Indian manufacturing is not inefficient in labour use as modest speed of adjustment has led employment size closer to the optimal level.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1596.
Length: 33 pages
Date of creation: May 2005
Date of revision:
Publication status: published in: Global Economic Review, 2005, 32(3), 261-290
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Other versions of this item:
- Amit Bhandari & Almas Heshmati, 2005. "Labour Use and its Adjustment in Indian Manufacturing Industries," Global Economic Review, Taylor and Francis Journals, vol. 34(3), pages 261-290.
- Heshmati, Almas & Bhandari, Amit K., 2005. "Labour use and its adjustment in Indian manufacturing industries," Discussion Papers 11855, MTT Agrifood Research Finland.
- C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
- L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
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