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Structural Transformation and Employment Generation in India: Past Performance and the Way Forward

Historical experience suggests that a sustained rise in per capita incomes and improvement in employment conditions is not attainable without a structural transformation that moves surplus labour from agriculture and other informal economic activities to higher productivity activities in the non-far...

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Autor principal: Basole, Amit
Formato: Online Artículo Texto
Lenguaje:English
Publicado: Springer India 2022
Materias:
Acceso en línea:https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9288666/
https://www.ncbi.nlm.nih.gov/pubmed/35874181
http://dx.doi.org/10.1007/s41027-022-00380-y
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author Basole, Amit
author_facet Basole, Amit
author_sort Basole, Amit
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description Historical experience suggests that a sustained rise in per capita incomes and improvement in employment conditions is not attainable without a structural transformation that moves surplus labour from agriculture and other informal economic activities to higher productivity activities in the non-farm economy. In this paper, I analyse India’s performance from a cross-country comparative perspective, estimating the growth semi-elasticity of structural change. Using a cross-country panel regression, I estimate the effectiveness of growth in moving workers away from agricultural and informal activities as compared to other developing countries at similar levels of per capita income. I show that the performance in pulling workers out of agriculture is as expected given its level and growth of GDP per capita, but the same is not true for pulling workers out of the informal sector. I also propose the following five indicators that need to be kept track of when evaluating the growth process: the growth elasticity of employment, the growth semi-elasticity of structural change, the growth of labour productivity in the subsistence sector, the share of the organised sector in total employment and the workforce participation rate. Comparing these indicators across periods, states, regions or countries, allows us to understand which sets of policies have worked better than others to effective improvements in employment conditions. And taken together the indicators allow us to set structural change targets as well as to say whether the current pattern of growth is going to be sufficient to meet those targets.
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spelling pubmed-92886662022-07-18 Structural Transformation and Employment Generation in India: Past Performance and the Way Forward Basole, Amit Indian J Labour Econ Article Historical experience suggests that a sustained rise in per capita incomes and improvement in employment conditions is not attainable without a structural transformation that moves surplus labour from agriculture and other informal economic activities to higher productivity activities in the non-farm economy. In this paper, I analyse India’s performance from a cross-country comparative perspective, estimating the growth semi-elasticity of structural change. Using a cross-country panel regression, I estimate the effectiveness of growth in moving workers away from agricultural and informal activities as compared to other developing countries at similar levels of per capita income. I show that the performance in pulling workers out of agriculture is as expected given its level and growth of GDP per capita, but the same is not true for pulling workers out of the informal sector. I also propose the following five indicators that need to be kept track of when evaluating the growth process: the growth elasticity of employment, the growth semi-elasticity of structural change, the growth of labour productivity in the subsistence sector, the share of the organised sector in total employment and the workforce participation rate. Comparing these indicators across periods, states, regions or countries, allows us to understand which sets of policies have worked better than others to effective improvements in employment conditions. And taken together the indicators allow us to set structural change targets as well as to say whether the current pattern of growth is going to be sufficient to meet those targets. Springer India 2022-07-17 2022 /pmc/articles/PMC9288666/ /pubmed/35874181 http://dx.doi.org/10.1007/s41027-022-00380-y Text en © The Author(s), under exclusive licence to Indian Society of Labour Economics 2022 This article is made available via the PMC Open Access Subset for unrestricted research re-use and secondary analysis in any form or by any means with acknowledgement of the original source. These permissions are granted for the duration of the World Health Organization (WHO) declaration of COVID-19 as a global pandemic.
spellingShingle Article
Basole, Amit
Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title_full Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title_fullStr Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title_full_unstemmed Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title_short Structural Transformation and Employment Generation in India: Past Performance and the Way Forward
title_sort structural transformation and employment generation in india: past performance and the way forward
topic Article
url https://www.ncbi.nlm.nih.gov/pmc/articles/PMC9288666/
https://www.ncbi.nlm.nih.gov/pubmed/35874181
http://dx.doi.org/10.1007/s41027-022-00380-y
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