Employment Elasticity Of Growth Research Articles

Analysing Growth Paths and Employment Performance of Indian Food Processing Industry: Uncovering Dynamics at the Sub-sectoral Level

Against the backdrop of a potential productivity-employment trade-off, the performance of the Indian Food Processing Industry (FPI) and its sub-sectors on key employment-related indicators was assessed over two decades (1998-99 to 2017-18). Based on ASI's 4-digit level dataset on FPI's 18 sub-sectors, the patterns of output growth were analysed and categorised into extensive, intensive, stagnant and virtuous growth paths. Pooled panel regression-based employment elasticities were estimated across subsectors to determine prospects of employment generation. Despite declining employment elasticities for aggregate FPI, prospects for future employment creation were found in the rapidly growing subsectors, which exhibited relatively higher employment elasticity of growth. The exploration of sub-sectoral dynamics highlights the need for adequately reflecting on the heterogeneity in employment-related parameters across growth paths and suitably inform policy interventions ing at a juncture when the Government of India has renewed emphasis on boosting employment in the organised manufacturing segment.

Turkish Economic Growth: (Non) Labour Creating? (2000-2018)

The study aims to analyse the long-term relationship between GDP and employment during 2000Q1-2018Q4. The relation is important for Turkey who has problems with employment creation capacity of growth. However, the high growth performance of Turkey during the 2000s employment ratios have well remained below OECD averages. Employment elasticity of growth is 0.15 for the 2004Q1-2018Q4 period with the Engle-Granger test. The elasticity for the entire period is much weaker, like 0.04. Johansen tests confirm the long-run cointegration between two variables, and an error-correction model (ECM) is built for detecting causality. Granger tests also reveal causality from GDP to employment.

Modeling Trade–Employment Elasticity Nexus: Evidence from India

The effect of trade on employment growth in India is a less-discussed issue in the international economics literature. Trade has increased the employment growth in India or not is still a debatable issue for many researchers. This study explores the impact of trade on India’s employment elasticity of growth using World development Indicator data of the World Bank and KLEMS database of India from 1982 to 2016. For this purpose, it has used the autoregressive distributed lag (ARDL) model of cointegration. The result indicates that although the share of trade in the national gross domestic product (GDP) has grown, it has failed to increase employment elasticity in the country. It may occur primarily because of the high volume of Indian imports. The share of the service sector in GDP, inflation, and foreign direct investment (FDI) are other vital factors influencing the employment intensity. Therefore, based on the empirical findings, it is suggested that policymakers should focus more on export, specifically on labor-intensive export. It will undoubtedly help to improve the employment level in the country.

Labour Market Flexibility and Changes in Employment: Spatial and Temporal Evidence from Indian Manufacturing

This paper delves into the debates concerning labour market flexibility in India and suggests an improved measure of labour market flexibility to overcome the shortcomings of the existing measures. A state-wise time-variant composite index considering both de jure and de facto indicators of flexibility is constructed to account for the stringency of regulation of hiring and firing practices that affect labour adjustment mechanism of organised manufacturing sector firms in India. The newly built index reaffirms the criticism and limitations of the existing measures which solely rely on de jure indicators by pointing out that de jure measures alone are highly misleading and insufficient to identify a state’s labour market flexibility status. The index has been put to application in examining the role of spatial variation in labour market flexibility in explaining the difference in employment growth in India’s organised manufacturing sector. The paper finds no evidence in support of a statistically significant effect of spatial variation in flexibility in explaining the variation in employment growth. Interestingly, the paper demonstrates that employment elasticity of growth was lower in “flexible” states as compared to the “rigid” states, indicating that greater flexibility is associated with a weaker employment performance.

Estimating Employment Elasticity of Growth in MSME Sector of India

Estimating Employment Elasticity of Growth in MSME Sector of India

Which Sectors Drive Egypt’s Growth And Employment?

Summary According to the International Monetary Fund, Egypt’s employment elasticity of growth in the last two decades was relatively low, as previous policies focused on capital deepening rather than improving labor utilization growth rate. This paper uses input-output analysis to identify the economic activities that have high output and employment multipliers at the subsector level of manufacturing and services in Egypt, while previous multiplier research for Egypt analyzed manufacturing as an aggregate sector. The top 20 ranking subsectors in terms Fof employment multipliers include 13 services and 7 manufacturing subsectors. Except for food and accommodation services, most of the services subsectors gain their high rank from direct and induced employment, with little contribution of backward interlinkages. The picture is mixed for manufacturing. For example, most of the employment effect of food products and beverages is attributed to the interlinkage with the agriculture sector, but the direct and induced employment effects are small. The paper presents an illustrative exercise which excludes imported intermediate inputs in order to account for the possible overestimation of the multiplier effect due to imports. The employment multiplier is reduced by more than 30% in the sectors which use intermediate inputs from high import upstream sectors.

Is Growth Immiserizing in Nigeria?

Nigeria has experienced quite significant growth over the past one decade, but the incidence of poverty has also increased suggesting that the growth is immiserizing. The immiserizing nature of the growth was supported by the estimates from the growth elasticity of poverty, the employment elasticity of growth and the quality of the growth spells. The determinants of immiserizing growth cut across economic, social, political and institutional factors that include dysfunctional behaviour, structure of the economy, rising inequality and resource misallocation. However, this does not imply that, at the margin, economic growth is not beneficial to the poor. The simple point is that there are many other factors other than economic growth that help explain the weak or missing linkages between macro-economic growth and household incomes. Domestic policies are necessary to reduce the various constraints inherent in the economy that makes growth immiserizing.

Comments by Maria Socorro Gochoco-Bautista, on In Search of a Strategy for Making Growth More Pro-Poor in the Philippines

Maria Socorro Gochoco-Bautista: There is a difference between structural transformation in which the share of agriculture in total output declines over time, and structural transformation in which the share of agricultural sector employment to total employment declines over time as a country develops. The authors state that they would like to focus on the output side of structural adjustment (i.e., what happens to the sectoral shares of output rather than the sectoral shares of labor).I think that, as the focus of the paper is pro-poor growth, it is more important to talk about people and employment rather than output. Indeed, the authors define growth as pro-poor “if and only if poor people benefit in absolute terms, as reflected in an appropriate measure of poverty.” The paper by Loayza and Raddatz (2006) that the authors themselves cite argues that the labor intensity of the growing sector rather than which economic sector in particular is growing is more important.This leads to my suspicion that what makes growth pro-poor is the ability of growth to generate good jobs, and to ultimately reduce the share of agricultural employment to total employment as the economy undergoes structural transformation and develops. If this is the case, then I am afraid that the paper is unable to shed light on how to generate pro-poor growth, even though it is able to point to factors that may generate growth in the economy in general. Of course, because the demand for labor is derived from the demand for output, one would expect the demand for labor to increase in fast-growing sectors and reduce poverty. In Asia, however, we have generally seen that although output growth has been robust, the share of employment in agriculture relative to non-agriculture remains high, and we know that the quality jobs are not in agriculture and that the majority of the poor are in rural areas. Perhaps the employment elasticity of growth in the non-agricultural sector may be low especially if production there is relatively capital intensive. The authors do not give a measure of the labor intensity of the fast-growing non-agricultural sector relative to the agricultural sector.Where to focus reform proposals is important because this has a bearing on policy implications. It is important to take into account where the distortions in the economy are in the context of institutional limitations and which act to prevent growth from being pro-poor. For example, there are barriers to job creation and entry into high-paying jobs in the non-agricultural or industrial sector that act as a tax on the most progressive sector of the economy. This limits the ability of the industrial sector to absorb surplus labor from the rural sector and retards the shift from agricultural to non-agricultural growth. Evidence for these distortions exists. In urban centers, for example, the unemployment rate among those with tertiary education is higher than in those with only primary or secondary levels of education, and the employment rate of the less educated is higher in sectors where regulations are not binding. Such barriers in labor markets may account for gaps in labor productivity between agricultural and non-agricultural sectors. For pro-poor growth, I think that it is important to focus on the labor market and employment generation aspects of structural transformation.In the regression equation, agricultural growth and non-agricultural growth are both entered as regressors, but the two are related to each other. Growth in the agricultural sector makes growth in the non-agricultural sector possible by opening up non-farm employment opportunities, a point the authors make themselves. But because the focus of the paper is on output growth rather than employment growth potential, it is difficult to know with certainty whether growth in any sector is pro-poor.

An Analyse of the Structural and Employment Implications of the 2014 GDP Rebasing in Nigeria

We analyzed the structural and employment implications of the recent Nigerian GDP rebasing exercise and the data released in its aftermath. Our analyses show that structural shifts revealed by the data are overstated by the extent of inclusion effects and by the extent to which the relative price effects are accurate. The estimates of employment elasticities of sectoral growth imply that the growth of manufacturing and service sectors generate approximately triple and quadruple the job creation elasticities of agricultural sector growth. The results suggest therefore, that the future of job creation in Nigeria lies more in policies that promote the competitiveness and growth of manufacturing and services. We recommend therefore that greater weight should be assigned to engineering sustainable structural changes, higher employment elasticity of growth in Nigeria hence, global competitiveness of the Nigerian economy.