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Job Polarisation in India: Structural Causes and Policy Implications

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  • Kuriakose, Francis
  • Kylasam Iyer, Deepa

Abstract

Automation impacts employment and wage levels at the micro-level, and the structure of employment-shift at the macro-level. Job polarisation is defined as the automation of ‘middle-skill’ jobs that require routine cognitive and manual applications while high and low-skill occupations are preserved. This paper examines the nature of job polarisation in India during the period 1983-2012 when Indian manufacturing was being gradually automated. The research uses disaggregated data from National Sample Survey Office and examines supply-side factors such as nature of employment growth in manufacture and presence of educated labour force which have not been adequately analysed before. The study has three observations. First, only the increased demand for high-skilled workers in the formal sector is due to skill-bias of technology conforming to theoretical expectation. Second, the transition of agricultural labourers has been to low-skill manufacturing sectors such as construction and textiles signalling distress in traditional manufacturing to provide employment. Third, over-supply of secondary and tertiary educated labour force has squeezed out middle-skilled workers from middle-skill jobs to relatively low-skill manufacturing and service occupations, explaining the persistence of routine occupations. The study concludes that increased demand for high and low-skill jobs has co-existed with the persistence of middle-skill jobs in India.

Suggested Citation

  • Kuriakose, Francis & Kylasam Iyer, Deepa, 2018. "Job Polarisation in India: Structural Causes and Policy Implications," MPRA Paper 96802, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:96802
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    File URL: https://mpra.ub.uni-muenchen.de/96802/1/MPRA_paper_96802.pdf
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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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    3. David H. Autor & David Dorn, 2013. "The Growth of Low-Skill Service Jobs and the Polarization of the US Labor Market," American Economic Review, American Economic Association, vol. 103(5), pages 1553-1597, August.
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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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