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Employment and Wages in the Liberalised Regime: A Study of Indian Manufacturing Sector

  • Majumder, Rajarshi

Expansion of earning opportunities and increment in earning levels are dual objectives of policymakers in developing countries. The structural adjustment programme in India tried to ensure both through higher growth targets, and manufacturing sector has seen the most sweeping changes. It is now being suggested that the current jobless growth is due to high wages. The present paper examines the veracity of this by examining the trends in employment and earnings in this sector over the nineties and analysing the factors affecting them. Most of the employment expansion has been in the unorganised sector where wages have stagnated. Though real wages in the factories have declined employment therein has not increased. Interestingly, both wages and employment have increased in the mid-sized units. The relationship is therefore neither unidirectional nor exhaustive. Proper mix of labour flexibility, resource availability, and scale economies would bring dynamism to the sector and increase both employment and earnings.

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Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 12809.

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Date of creation: Dec 2006
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Handle: RePEc:pra:mprapa:12809
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  1. Bhalotra, Sonia R, 1998. "The Puzzle of Jobless Growth in Indian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(1), pages 5-32, February.
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