Jobless growth through the lens of structural transformation
Indian Growth and Development Review
ISSN: 1753-8254
Article publication date: 28 August 2019
Issue publication date: 11 November 2019
Abstract
Purpose
This paper aims to analyse the observed “jobless growth” between 1993-1994 and 2011-2012 based on structural transformation to explain why the elasticity of employment generation to gross domestic product growth has declined during this period.
Design/methodology/approach
This paper uses the job generation and growth decomposition tool to quantify the effects of inter-sectoral mobility of workers, intra-sectoral productivity changes and demographic changes on per capita value added growth. Alternative scenarios are generated to simulate the effect of higher female labour participation rates.
Findings
Structural transformation in India between 1993-1994 and 2011-2012 was characterised by increasing labour productivity in most sectors, inter-sectoral mobility of workers and a decline in the employment rate. About 81 per cent of the increase in per capita value added was because of a rise in labour productivity; about 24 per cent was because of inter-sectoral shifts of labour; and about 9 per cent because of demographic changes. The decline in the employment rate had a negative effect of −14.20 per cent. The process of transformation was unconventional. First, labour productivity growth was the highest in the service sector and second, the bulk of the movement of labour was to the construction sector.
Research limitations/implications
This paper focusses only on the quantitative dimensions of employment and offers no new explanations why female labour force participation declined.
Originality/value
This paper offers a new perspective on the debate of jobless growth focussing on structural transformation.
Keywords
Acknowledgements
The author would like to thank the guest editor and the anonymous referees for insightful comments on this paper. The author also wish to thank participants of the ISI-World Bank “Workshop on Jobless Growth in South Asia” held on 8th March 2018 at ISI Delhi for commenting on an earlier version of the paper. The author is solely responsible for all errors and omissions.
Citation
Abraham, V. (2019), "Jobless growth through the lens of structural transformation", Indian Growth and Development Review, Vol. 12 No. 2, pp. 182-201. https://doi.org/10.1108/IGDR-07-2018-0077
Publisher
:Emerald Publishing Limited
Copyright © 2019, Emerald Publishing Limited