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Structural Changes in Employment in India, 1980-2011

K L Krishna, Suresh Aggarwal (), Abdul Azeez Erumban () and Deb Kusum Das
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K L Krishna: Department of Economics, Delhi School of Economics, University of Delhi
Deb Kusum Das: Department of Economics, Ramjas College, University of Delhi

No 262, Working papers from Centre for Development Economics, Delhi School of Economics

Abstract: The paper documents the growth of employment and the structural changes in Indian economy during 1980-2011 period using India KLEMS database version 2015. Issues related to labor quality have also been documented and analyzed. We observe that employment grew at 2.1 percent per year during 1980-1993 but it fell to 1.6 percent during 1994-2002 and further to just 1 percent during 2003-2011. The growth in persons employed during the entire period of study, 1980-2011 is led by construction and the services sector, possibly due to less labor regulations, followed by the secondary sector-consisting of manufacturing, electricity; gas and water supply and then agriculture. There has been a structural shift of employment from agriculture to construction and services, especially market-based services. The plausible reasons for slow growth in employment have been low labor force participation rates, especially by females, low labor intensity, and use of high capital intensive technology in production. The quality of labor in India is characterized by the poor among the employed, low share of persons employed with skills (employed persons with education level “above higher secondary” was only 10.2% in 2011 in the total economy), low growth rate in educational attainments, high proportion of persons employed as casual labor and a very high share of unorganized sector employment. Though the Indian economy is supposed to enjoy the fruits of demographic dividend and achieve high growth rates but the recent trend of falling employment elasticity (just 0.07 during 2003-2011) paints a very disappointing employment scenario. Even the sustainability of the service sector to provide jobs in future is in doubt because of its falling employment elasticity in recent years.

Keywords: employment; labor quality; education; employment elasticity (search for similar items in EconPapers)
JEL-codes: I20 (search for similar items in EconPapers)
Pages: 48 pages
Date: 2016-10
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