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Importance of Employment Growth: A Perspective on Technological Progress

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  • Satya Prasad Padhi

    (Panjab University)

Abstract

The two mainstream points of view regarding employment—the neo-classical view and the Keynesian system—remain silent on the possibility that employment growth plays a strategic and crucial role that it induces investment that is more productive and is responsible for technological progress. In this context, the paper tries to show that there is a third view of employment where the generation of more productive employment, reflecting new employment with higher money and real wages, induces the advanced growth processes. Such employment is an index of division of labour that supports further division of labour, forming the basis of a cumulative causation growth process as discussed by Young (Econ J, 38(152):527–542, 1928) and Kaldor (Econ J, 82(328):1237–1255, 1972). In this hypothesis, employment creation refers to new employment opportunities with higher specialization that commands higher wages and should permit higher returns to the firms. This new employment opportunities induce more investment (guided by increasing returns), providing more of such employment opportunities, and form the basis of a growth process that reflects developed status.

Suggested Citation

  • Satya Prasad Padhi, 2018. "Importance of Employment Growth: A Perspective on Technological Progress," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 61(2), pages 401-409, June.
    • Handle: RePEc:spr:ijlaec:v:61:y:2018:i:2:d:10.1007_s41027-018-0135-2
    DOI: 10.1007/s41027-018-0135-2
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