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The Historical Roots Of India’s Service-Led Development : A Sectoral Analysis Of Anglo-Indian Productivity Differences, 1870-2000

  • Broadberry, Stephen

    (Department of Economics, University of Warwick)

  • Gupta, Bishnupriya

    (Department of Economics, University of Warwick)

Overall labour productivity in India was already only around 15 per cent of the UK level between the early 1870s and the late 1920s. Between 1929 and 1950 India fell further behind and remained at around 10 per cent of the UK level until the 1970s. India has been catching-up since the 1970s, but by the end of the twentieth century was still further behind than in the late nineteenth century. Agriculture has played an important role in India’s relative decline to 1950 and subsequent delay in catching up, since comparative India/UK labour productivity in this sector has declined continuously and agriculture still accounts for around two-thirds of employment in India. Comparative India/UK labour productivity in industry has fluctuated around a level of around 15 per cent. The only sector to exhibit trend improvement in comparative India/UK labour productivity over the long run is services, rising from around 15 per cent to around 30%. India’s recent emergence as a dynamic service-led economy appears to have long historical roots.

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File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2008/twerp_817.pdf
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Paper provided by University of Warwick, Department of Economics in its series The Warwick Economics Research Paper Series (TWERPS) with number 817.

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Length: 26 pages
Date of creation: 2007
Date of revision:
Handle: RePEc:wrk:warwec:817
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  1. Stephen Broadberry & Douglas A. Irwin, 2007. "Lost Exceptionalism? Comparative Income and Productivity in Australia and the UK, 1861-1948," The Economic Record, The Economic Society of Australia, vol. 83(262), pages 262-274, 09.
  2. Paul Bergin & Reuven Glick & Alan M. Taylor, 2004. "Productivity, Tradability, and the Long-Run Price Puzzle," NBER Working Papers 10569, National Bureau of Economic Research, Inc.
  3. Barry Bosworth & Susan M. Collins, 2007. "Accounting for Growth: Comparing China and India," NBER Working Papers 12943, National Bureau of Economic Research, Inc.
  4. S. Mahendra Dev, 2008. "India," Chapters, in: Handbook on the South Asian Economies, chapter 1 Edward Elgar.
  5. Pilat, Dirk, 1993. "The Sectoral Productivity Performance of Japan and the U.S., 1885-1990," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 39(4), pages 357-75, December.
  6. Timberg, Thomas A & Aiyar, C V, 1984. "Informal Credit Markets in India," Economic Development and Cultural Change, University of Chicago Press, vol. 33(1), pages 43-59, October.
  7. Stephen Broadberry & Bishnupriya Gupta, 2006. "The early modern great divergence: wages, prices and economic development in Europe and Asia, 1500-1800 -super-1," Economic History Review, Economic History Society, vol. 59(1), pages 2-31, 02.
  8. Barry Bosworth & Susan M. Collins & Arvind Virmani, 2006. "Sources of Growth in the Indian Economy," India Policy Forum, Global Economy and Development Program, The Brookings Institution, vol. 3(1), pages 1-69.
  9. Robert J. Barro & Jong-Wha Lee, 2000. "International Data on Educational Attainment: Updates and Implications," CID Working Papers 42, Center for International Development at Harvard University.
  10. Ward, Marianne & Devereux, John, 2003. "Measuring British Decline: Direct Versus Long-Span Income Measures," The Journal of Economic History, Cambridge University Press, vol. 63(03), pages 826-851, September.
  11. Broadberry, Stephen N, 1992. "Manufacturing and the Convergence Hypothesis: What the Long Run Data Show," CEPR Discussion Papers 708, C.E.P.R. Discussion Papers.
  12. N. F. R. Crafts & C. K. Harley, 1992. "Output growth and the British industrial revolution: a restatement of the Crafts-Harley view," Economic History Review, Economic History Society, vol. 45(4), pages 703-730, November.
  13. Bela Balassa, 1964. "The Purchasing-Power Parity Doctrine: A Reappraisal," Journal of Political Economy, University of Chicago Press, vol. 72, pages 584.
  14. Chaudhary, Latika, 2009. "Determinants of Primary Schooling in British India," The Journal of Economic History, Cambridge University Press, vol. 69(01), pages 269-302, March.
  15. Stephen N. Broadberry & Douglas A. Irwin, 2004. "Labor Productivity in Britain and America During the Nineteenth Century," NBER Working Papers 10364, National Bureau of Economic Research, Inc.
  16. Broadberry, Stephen, 2003. "Relative Per Capita Income Levels in the United Kingdom and the United States since 1870: Reconciling Time-Series Projections and Direct-Benchmark Estimates," The Journal of Economic History, Cambridge University Press, vol. 63(03), pages 852-863, September.
  17. Ward, Marianne & Devereux, John, 2004. "Relative U.K./U.S. Output Reconsidered: A Reply to Professor Broadberry," The Journal of Economic History, Cambridge University Press, vol. 64(03), pages 879-891, September.
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