Indian manufacturing industries have experienced the major effects of economic reforms. Since the effect of any policy is ultimately transferred to workers, this article is an attempt to determine the extent to which labour productivity and wages are inter-related in manufacturing industries. The study uses state-level panel data of manufacturing industries and empirically tests the relevance of marginal productivity theory of wages and efficiency wage theory. After confirming the stationarity of the series, various empirical tests such as cointegration, vector error correction mechanism and Granger causality are applied to check the long-run equilibrium relationship between wage growth and productivity growth. The study finds a divergence between wages and productivity in India as well as in the states. The empirical analysis confirms the existence of long-run relationship between the two variables and finds efficiency wage theory to be more appropriate as its long-term disequilibrium correcting process is quicker as compared to the marginal productivity theory. The study suggests for having a skill intensity matching with capital intensity. Appropriate level of skill and training among the workers will, on the one hand, increase their bargaining strength for more compensation, and on the other hand, will encourage them to produce more. JEL: J31, J24, O30, F66, L66

中文翻译：

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印度制造业中的工资与生产率关系：来自州级面板数据的证据

印度制造业经历了经济改革的主要影响。由于任何政策的效果最终都会转移到工人身上，因此本文试图确定制造业中劳动生产率和工资之间相互关联的程度。该研究使用制造业的国家级面板数据，并通过经验检验了工资的边际生产率理论和效率工资理论的相关性。在确认了序列的平稳性之后，应用了各种经验检验，例如协整，向量误差校正机制和格兰杰因果关系，以检验工资增长与生产率增长之间的长期均衡关系。该研究发现印度和各州的工资与生产率之间存在差异。实证分析证实了这两个变量之间存在长期关系，并发现效率工资理论比边际生产率理论更快，因为它的长期不平衡修正过程更快。研究表明，技能强度应与资本强度相匹配。工人之间适当的技能和培训水平将一方面增加他们的讨价还价能力以争取更多的报酬，另一方面将鼓励他们生产更多的东西。JEL：J31，J24，O30，F66，L66 研究表明，技能强度应与资本强度相匹配。工人之间适当的技能和培训水平将一方面增加他们的讨价还价能力以争取更多的报酬，另一方面将鼓励他们生产更多的东西。JEL：J31，J24，O30，F66，L66 研究表明，技能强度应与资本强度相匹配。工人之间适当的技能和培训水平将一方面增加他们的讨价还价能力以争取更多的报酬，另一方面将鼓励他们生产更多的东西。JEL：J31，J24，O30，F66，L66