Output and Labor Market in Organised Manufacturing: A Panel Cointegration Analysis for India

Mita Bhattacharya and Paresh Narayan ()

No 61-13, Monash Economics Working Papers from Monash University, Department of Economics

Abstract: One of the policy puzzles faced in India during the last two and half decades has been the weak association between output and employment growth, particularly in the manufacturing sector. In this paper, we investigate the long-run relationship among output (measured in value added), wages (measured in real term) and labor productivity in the case of organised sector in Indian manufacturing. Using panel data from 17 manufacturing industries at the two-digit level, we find that output-real wages-labor productivity series is panel co-integrated. For industry panels, real wages have an insignificant negative effect on output, while labor productivity has a significant positive effect. Our findings suggest that the implementation of policies particularly in improving labor productivity will have a direct effect in generating output and employment in this sector.

Keywords: labor productivity; real wages; panel unit root tests; Indian manufacturing (search for similar items in EconPapers)
JEL-codes: O30 O47 O53 (search for similar items in EconPapers)
Pages: 22 pages
Date: 2013-07
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.buseco.monash.edu.au/eco/research/papers/2013/index.html (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden (http://www.buseco.monash.edu.au/eco/research/papers/2013/index.html [301 Moved Permanently]--> https://www.monash.edu/business/ [301 Moved Permanently]--> https://www.monash.edu/business)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:mos:moswps:2013-61

Ordering information: This working paper can be ordered from
https://www.monash.e ... esearch/publications

Access Statistics for this paper

More papers in Monash Economics Working Papers from Monash University, Department of Economics Department of Economics, Monash University, Victoria 3800, Australia. Contact information at EDIRC.
Bibliographic data for series maintained by Simon Angus ().