The Growth-Employment Relationship Since 2000

Abstract: This discussion paper is a brief assessment of the employment challenge that become manifest in the Indian economy during the past decade. It analyses various available economic indicators and presents estimates that highlight the structural transformations that have taken place. The key issue that the paper examines is whether high rates of growth registered by the Indian economy in the past decade were accompanied by substantive growth in employment. It brings out how the Indian economy over the last decade seems to have experienced all the classic features earmarked in literature while discussing the crisis of employment in case of large developing countries. Overall employment elasticties have been falling, wage inequalities have been rising, there is a rise in informalisation and casualisation of labour force and there exists a substantial number of working poor. It also demonstrates that employment growth rates and elasticities in the growing sectors of the economy (with the exception of construction) have been experiencing a fall in the long-run. This has retarded the process of absorbing the unemployed and underemployed labour force into more productive and dynamic employment opportunities.

Keywords: Employment growth, informal sector, jobless growth.