Specific Human Capital and Skills in Indian Manufacturing: Observed Wage and Tenure Relationships from a Worker Survey

Successive Indian governments have attempted to increase the growth in employment alongside encouraging skill enhancement. Against this background, we empirically explore issues surrounding the investment in specific capital by workers. In particular, we try to discern the presence of specific human capital investment by investigating whether there is a link between tenure and wages and find that there is indeed such a link evident in India. This allows us to infer that it is valuable to have long-term relations between employers and their workers and therefore labour market institutions that support long-term employer–employee relationship need to be encouraged.