IDEAS home Printed from
   My bibliography  Save this paper

The Impact of Trade Liberalisation on Employment: Evidence from India’s Manufacturing Sector


  • Kakarlapudi, Kiran Kumar


The Opening up of the economy brought in phenomenal changes in various dimensions of the economy. The growth performance of the Indian economy, though not spectacular, has been decent by the standards of developing countries after initiation of economic reforms. There has been a great debate in academia that the growth was not accompanied by an increase in employment growth. Stagnant growth in employment with impressive economic performance during last two decades is termed as “jobless growth”. Since the manufacturing employment has been subject to sweeping changes in the post reform period, this paper attempts to examine the possible impact of trade liberalisation on the growth of organised manufacturing employment at two digit levels by dividing industries into export oriented and import competing industries. Both the overall and manufacturing employment trends shows that there is a reduction in employment growth in the post- liberalisation period compare to the pre-liberalisation period. It is further found that deceleration of employment growth in the import competing industries is higher than export competing industries and that; trade liberalisation did not create any growth in employment through scale effect.

Suggested Citation

  • Kakarlapudi, Kiran Kumar, 2010. "The Impact of Trade Liberalisation on Employment: Evidence from India’s Manufacturing Sector," MPRA Paper 35872, University Library of Munich, Germany, revised 10 Jan 2012.
  • Handle: RePEc:pra:mprapa:35872

    Download full text from publisher

    File URL:
    File Function: original version
    Download Restriction: no

    References listed on IDEAS

    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.
    2. Rattso, Jorn & Torvik, Ragnar, 1998. "Zimbabwean Trade Liberalisation: Ex Post Evaluation," Cambridge Journal of Economics, Oxford University Press, vol. 22(3), pages 325-346, May.
    3. Majumder, Rajarshi, 2006. "Wages and Employment in the Liberalised Regime: A Study of Indian Manufacturing Sector," MPRA Paper 4851, University Library of Munich, Germany.
    4. Rashmi Banga, 2007. "Impact of Liberalisation on Wages and Employment in Indian Manufacturing Industries," Working Papers id:989, eSocialSciences.
    5. Bishwanath GOLDAR & Suresh Chand AGGARWAL, 2005. "Trade Liberalization And Price-Cost Margin In Indian Industries," The Developing Economies, Institute of Developing Economies, vol. 43(3), pages 346-373, September.
    6. Milner, Chris & Wright, Peter, 1998. "Modelling Labour Market Adjustment to Trade Liberalisation in an Industrialising Economy," Economic Journal, Royal Economic Society, vol. 108(447), pages 509-528, March.
    7. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    8. Fallon, Peter R. & Lucas, Robert E. B., 1993. "Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe," Journal of Development Economics, Elsevier, vol. 40(2), pages 241-275, April.
    9. Rana Hasan & Devashish Mitra & K.V. Ramaswamy, 2007. "Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India," The Review of Economics and Statistics, MIT Press, vol. 89(3), pages 466-481, August.
    10. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
    11. Mauricio Mesquita Moreira & Sheila Najberg, 2000. "Trade liberalisation in Brazil: Creating or exporting jobs?," Journal of Development Studies, Taylor & Francis Journals, vol. 36(3), pages 78-99.
    12. Montek S. Ahluwalia, 2002. "Economic Reforms in India Since 1991: Has Gradualism Worked?," Journal of Economic Perspectives, American Economic Association, vol. 16(3), pages 67-88, Summer.
    Full references (including those not matched with items on IDEAS)

    More about this item


    Trade liberalisation; Manufacturing sector; Employment;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions


    Access and download statistics


    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:35872. 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: (Joachim Winter). General contact details of provider: .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.