MPIA-12598 Trade Liberalisation and Employment Effects in Indian Manufacturing: An Empirical Assessment

Abstract

The purpose of the study is to examine the impact of international trade on manufacturing employment in India over 2004-2011. The theoretical literature suggests that trade affects the demand for labor through scale, composition and process effects. Since India is largely a labor abundant country, its comparative advantage rests in labor intensive manufacturing. However, the study finds that since the onset of reforms, production and trade specialization has been biased towards capital-intensive production and, therefore has failed to absorb the vast pool of labor resources. The study finds that in general the labor demand elasticity has fallen in the global economic crisis period except for skilled workers. The export orientation has a relatively greater impact on employment, especially for skilled workers in the crisis period. The overall impact was negative during the crisis. The survey of selected manufacturing firms shows that trade costs are higher for labor-intensive firms.

Members

Project leader: Sunitha Raju

Project researchers: BIBEK RAY CHAUDHURI | Mridula Savitri Mishra

Working Papers

	Title	Modified	Size	Comments	Recommendations
	Trade liberalization and employment effects in Indian manufacturing: An empirical assessment	2016-09-14	4608.32KB	0	0

Policy Briefs

	Title	Modified	Size	Comments	Recommendations
	Trade liberalisation and employment effects in Indian manufacturing	2016-07-25	452.14KB	0	0

Proposal

	Title	Modified	Size	Comments	Recommendations
		2014-07-25	557.69KB	0	0

Final report

	Title	Modified	Size	Comments	Recommendations
	Trade Liberalisation and Employment Effects in Indian Manufacturing: An Empirical Assessment	2015-07-06	923.52KB	0	0