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An Econometric Analysis Of Determinants Of Employment Growth In India'S Industrial Sector

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  • Deepak Kumar BEHERA

Abstract

The scale and scope of industrial employment is considered as the path of transformation of an economy. But developing countries like India seems to have missed this transformation trajectory where it's share grows in terms of income but not in employment. Albeit, growth of industrial sector income can spur the growth of service sector, the growth of the former is necessary for the latter and both need a commensurate growth of agricultural output. Therefore, the pertinent questions are what is its potential to generate employment? Can it assume as the emerging sector to accommodate the surplus labour? In other words, the paper examines the employment dynamics in both organised and unorganised Industrial sector by empirically estimates the effects of macro-economic variables by using the data from 1972-73 to 2011-12. Considering the Keynesian theoretical explanation about the change in employment that depends on expected output or change in output, the empirical estimations corroborate the view that performance of industrial sector determines the capacity to generate employment in the sector where employment in organised industrial is positively influenced by non-industrial income, lagged industrial output, investment, non-agricultural import and negatively associated with labour productivity and capital-labour ratio. . It is surprising to see that non-agricultural export have shown a positive impact to employment but very minimal. The employment in unorganised industry is positively influenced by non-industry income, lagged output, and gross capital formation. It is negatively influenced by capital-labour ratio, labour productivity, and non-agricultural export.

Suggested Citation

  • Deepak Kumar BEHERA, 2019. "An Econometric Analysis Of Determinants Of Employment Growth In India'S Industrial Sector," Regional and Sectoral Economic Studies, Euro-American Association of Economic Development, vol. 19(1), pages 47-62.
    • Handle: RePEc:eaa:eerese:v:19:y2019:i:1_3
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    References listed on IDEAS

    as
    1. Panagariya, Arvind, 2011. "India: The Emerging Giant," OUP Catalogue, Oxford University Press, number 9780199751563.
    2. Fishlow, Albert, 1971. "Economic Growth of Nations. By Simon Kuznets. Cambridge, Mass., Harvard University Press, 1971. Pp. xii + 363. $15.00," Business History Review, Cambridge University Press, vol. 45(4), pages 514-516, January.
    3. Tendulkar, Suresh D. & Bhavani,, 2007. "Understanding Reforms: Post 1991 India," OUP Catalogue, Oxford University Press, number 9780195687118.
    Full references (including those not matched with items on IDEAS)

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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. 40. Lists of articles on economic development of journal RSES, 2001-2020
      by MCG Blogs de Economía in Euro-American Association: World Development on 2020-02-25 20:32:00

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    More about this item

    Keywords

    India; Industrial Sector; Employment; Organised Sector; Unorganised Sector; Investment; labour Productivity; Non-agricultural import.;
    All these keywords.

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • E12 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Keynes; Keynesian; Post-Keynesian; Modern Monetary Theory
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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