Pattern of Growth of Output in Relation to Employment across the States in India

Abstract

The present paper analyses the relation between the growth of output and the growth of employment across the 21 major states in India during the post-reform period. The growth rate of output significantly increased during the post-reform period in India but not the growth rate of employment. Average productivity of labour and per capita gross domestic product shown the upward trend while they were diverging from each other. But the growth of employment has been misleading. The nature of growth across states in India is analysed in terms of output elasticity of employment. The growth was ‘jobless’in 20 states and ‘more job’ providing in only one state during 1993-94 to 2004-05. The employment scenario deteriorated thereafter and ‘job loss’ growth was observed in 3 states and ‘jobless’ in 18 states during 2004-05 to 2011-12. A number of states have observed ‘more job’ growth in the agriculture and industry sectors, while the service sector witnessed‘jobless growth’ in the all states of India. The panel data analysis revels that the growth rate of employment is  positively related with the growth rate of output and negatively related with the growth rate of labour productivity. The study finds that the growth of labour productivity adversely affects the growth of employment in India.