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

Majumder, Rajarshi (2006): Employment and Wages in the Liberalised Regime: A Study of Indian Manufacturing Sector. Published in: Indian Journal of Labour Economics , Vol. 4, No. 49 (December 2006)

Abstract

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.

• Item Type: MPRA Paper
• Language: English
• Keywords: Employment; Wage; Manufacturing Sector; Unorganised Sector
• Subjects: J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; L - Industrial Organization > L6 - Industry Studies: Manufacturing

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