Employment and Productivity Relationships in the Manufacturing Industries of India Vis-a-Vis Select Developed Nations

Abstract

After World War II, the global economy has experienced unprecedented dimensions of industrial growth leading to a highly developed and diversified manufacturing industrial activity across these nations. These developments in the manufacturing sector over the last few decades have been quite phenomenal and have resulted in economic growth impelled by import substitution, export promotion, and acquisition of modern technological capabilities. However, all these developments have been over shadowed by a general failure of the industrial sector in generating adequate employment to absorb the increasing number of work force. In the developed nations, the proportion of labour engaged in the industrial sector has increased considerably, but periodically has been haunted by the problem of unemployment. In the developing nations also, the share of manufacturing employment in the aggregate employment has increased steadily. But, the growth rates over the years have not been sufficient enough to achieve a breakthrough in the structural patterns of employment. In this study, an attempt is made to comprehensively analyze the determinants of demand for labour in the manufacturing industries at three digit level disaggregation for India in comparison to selected developed nations during 1985-1986 to 2009-2010.

Keywords: Productivity, Labour Productivity, Manufacturing Industries, Employment in Manufacturing Industries

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