Impact of Special Economic Zones on Employment, Poverty and Human Development
This study aims at examining the impact of Special Economic Zones (SEZs) on human development and poverty reduction in India. It identifies three channels through which SEZs address these issues : employment generation, skill formation (human capital development), and technology and knowledge upgradation. It examines how the impact of SEZs is passed through each of these channels. The study finds that the modality differs significantly according to the characteristics of the SEZs, in particular, the level of their development as reflected in the composition of economic activities. Within this framework, the study examines the sectoral and economic composition of SEZ activities in India. It finds that labour intensive, skill intensive and technology intensive firms co exist in Indias zones and, therefore argues that all the three effects described above are likely to be important in the Indian context. Empirical findings reported in the study are based on the data collected from both secondary sources and primary surveys. The primary survey based data was generated through extensive interviews of entrepreneurs and workers across the three largest SEZs (in terms of their contribution to exports and employment) : SEEPZ, Madras and Noida. The analysis reveals that employment generation has been the most important channel through which SEZs lend themselves to human development concerns, in India. Employment generated by zones is remunerative. Wage rates are not lower than those prevailing outside the zones. Besides, working conditions, non monetary benefits (such as transport, health and food facilities), incentive packages and social security systems are better than those prevailing outside the zones, in particular, in the small/informal sector. The role of SEZs in human capital formation and technology upgradation is found to be rather limited. The study argues that the zones potential could not be exploited fully in India. This could primarily be attributed to the limited success of SEZs in attracting investment and promoting exports. The new SEZ policy gives a major thrust to SEZs. However the creation of SEZs alone does not ensure the realization of their potential. The government will need to play a more proactive role for effective realization of the full range of benefits from SEZs.
|Date of creation:||Jan 2007|
|Date of revision:|
|Contact details of provider:|| Postal: JG Crawford Building #13, Asia Pacific School of Economics and Government, Australian National University, ACT 0200|
Web page: http://www.eaber.org
More information through EDIRC
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.:
- Oh WS, 1993. "Export processing zones in the Republic of Korea: economic impact and social issues," ILO Working Papers 297464, International Labour Organization.
- Johansson, Helena & Nilsson, Lars, 1997. "Export processing zones as catalysts," World Development, Elsevier, vol. 25(12), pages 2115-2128, December.
- Aradhna Aggarwal, 2007.
"Liberalisation, Multinational Enterprises and Export Performance: Evidence from Indian Manufacturing,"
- A. Aggarwal, 2002. "Liberalisation, Multinational Enterprises and Export Performance: Evidence from Indian Manufacturing," Journal of Development Studies, Taylor & Francis Journals, vol. 38(3), pages 119-137.
- Willmore, Larry, 1995. "Export processing zones in the Dominican Republic: A comment on Kaplinsky," World Development, Elsevier, vol. 23(3), pages 529-535, March.
- repec:dau:papers:123456789/4582 is not listed on IDEAS
- Willmore, Larry, 1997. "Export promotion policies in Central America," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), August.
- Sivalingam, G, 1994. "The Economic and social impact of export processing zones : the case of Malaysia," ILO Working Papers 304973, International Labour Organization.
- Takayoshi Kusago & Tzannatos, Zafiris, 1998. "Export processing zones : a review in need of update," Social Protection and Labor Policy and Technical Notes 20046, The World Bank.
- Jean-Pierre Cling & Gaëlle Letilly, 2001. "Export processing zones : A threatened instrument for global economy insertion ?," Working Papers DT/2001/17, DIAL (Développement, Institutions et Mondialisation).
- Enrique Blanco de Armas & Mustapha Sadni Jallab, 2002. "A Review of the Role and Impact of Export Processing Zones in World Trade : the Case of Mexico," Post-Print halshs-00178444, HAL.
- Bhattacharya, Debapriya, 1998. "Export processing zones in Bangladesh : economic impact and social issues," ILO Working Papers 327692, International Labour Organization.
- Madani, Dorsati, 1999. "A review of the role and impact of export processing zones," Policy Research Working Paper Series 2238, The World Bank.
- Brent Boning & Casey Ichniowski & Kathryn Shaw, 2001.
"Opportunity Counts: Teams and the Effectiveness of Production Incentives,"
NBER Working Papers
8306, National Bureau of Economic Research, Inc.
- Brent Boning & Casey Ichniowski & Kathryn Shaw, 2007. "Opportunity Counts: Teams and the Effectiveness of Production Incentives," Journal of Labor Economics, University of Chicago Press, vol. 25, pages 613-650.
- Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
- Robert J. Rolfe & Douglas P. Woodward & Bernard Kagira, 2004. "Footloose And Tax Free: Incentive Preferences In Kenyan Export Processing Zones," South African Journal of Economics, Economic Society of South Africa, vol. 72(4), pages 784-807, 09.
- Lemoine, Francoise & Unal-Kesenci, Deniz, 2004. "Assembly Trade and Technology Transfer: The Case of China," World Development, Elsevier, vol. 32(5), pages 829-850, May.
When requesting a correction, please mention this item's handle: RePEc:eab:develo:22140. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Shiro Armstrong)
If references are entirely missing, you can add them using this form.