Destruction or Polarization: Estimating the Impact of Technology on Jobs in Indian Manufacturing

Pankaj Vashisht ()
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Pankaj Vashisht: Indian Council for Research on International Economic Relations (ICRIER)

The Indian Journal of Labour Economics, 2018, vol. 61, issue 2, No 2, 227-250

Abstract: Abstract Indian manufacturers have invested significantly in technological upgradation since the opening up of Indian economy to foreign trade and technology in the mid-1980s. In this paper, we examine the impact of technology on employment and skill demand within Indian manufacturing sector. Estimating a dynamic labour demand equation, we find that despite reducing the required labour per unit of output, technology has not reduced the aggregate employment in Indian manufacturing sector. However, qualitative effect of technology on labour demand has been very significant. Our results show that adoption of new technology has increased the demand for high-skilled workers at the cost of intermediary skills, leading to the polarization of manufacturing jobs. It suggests that perhaps technology has reduced the routine-task content of manufacturing jobs in India.

Keywords: Technology; Employment; Labour demand; Skill (search for similar items in EconPapers)
JEL-codes: J23 J24 O32 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (5)

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DOI: 10.1007/s41027-018-0127-2

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