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Job Polarisation in India: Structural Causes and Policy Implications

Author

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  • Francis Kuriakose

    () (University of Cambridge)

  • Deepa Kylasam Iyer

    () (University of Cambridge)

Abstract

Automation impacts wage levels at the micro-level and the structure of employment at the macro-level. Job polarisation is defined as the automation of ‘middle-skilled’ jobs that require routine cognitive and manual applications, whilst high- and low-skilled occupations are preserved. This paper examines the nature of job polarisation in India during the period 1983–2012 when Indian manufacturing sector was being automated. The research uses disaggregated data from National Sample Survey Office and examines the impact of supply-side factors such as nature of employment and presence of educated labour force. The study has three observations. First, the increased demand for high-skilled workers in the formal manufacturing sector is due to skill bias of technology and conforms to theoretical expectation. Second, the transition of agricultural labourers to low-skilled manufacturing sectors such as construction and textiles signals distress in traditional manufacturing sector to provide employment to these groups. Third, the over-supply of secondary and tertiary educated labour force has resulted in the squeezing out of middle-skilled workers from middle-skilled jobs to relatively low-skilled manufacturing and service occupations. This explains the persistence of routine occupations even after automation. The study concludes that in the Indian manufacturing sector, increased demand for high- and low-skilled jobs has coexisted with the middle-skilled jobs due to supply-side factors.

Suggested Citation

  • Francis Kuriakose & Deepa Kylasam Iyer, 2020. "Job Polarisation in India: Structural Causes and Policy Implications," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 63(2), pages 247-266, June.
  • Handle: RePEc:spr:ijlaec:v:63:y:2020:i:2:d:10.1007_s41027-020-00216-7
    DOI: 10.1007/s41027-020-00216-7
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    References listed on IDEAS

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    1. Chamarbagwala, Rubiana, 2006. "Economic Liberalization and Wage Inequality in India," World Development, Elsevier, vol. 34(12), pages 1997-2015, December.
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    Cited by:

    1. Nippani, Abishek, 2020. "Automation and Labour in India: Policy Implications of Job Polarisation pre and post COVID-19 crisis," SocArXiv h9gaw, Center for Open Science.

    More about this item

    Keywords

    Automation; Job polarisation; Supply-side factors; Manufacturing; India;

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J4 - Labor and Demographic Economics - - Particular Labor Markets
    • J48 - Labor and Demographic Economics - - Particular Labor Markets - - - Particular Labor Markets; Public Policy
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D

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