Academic journal article Indian Journal of Industrial Relations

Jobless Growth: A District-Level Analysis of Tamil Nadu 2001-05

Academic journal article Indian Journal of Industrial Relations

Jobless Growth: A District-Level Analysis of Tamil Nadu 2001-05

Article excerpt

The Study

The phenomenon of jobless growth is identified with high growth in value-added with low growth in employment. It is also associated with the hypothesis of job displacement implying that the net creation of employment is either negligibly small or even negative (i.e. a decline) as job creation in some regions/industries is offset by job losses in others. In this context, the study of sub-national regions at the level of a state and at its further disaggregation in to districts is useful for focused policy attention aimed at achieving balanced regional development. This paper presents the findings of a district level data analysis on the organised manufacturing units in the state of Tamil Nadu (TN). The study is confined to the first quinquennium of the new millennium (2001-05) in view of the availability of data for this period. The results are expected to reveal the impact of reforms initiated in the early years of 1990s having allowed a reasonable gap of time period for adjustment. The job creation during the period in OMS should ideally be compared with the corresponding trends in their unorganised counterpart viz. the unorganised manufacturing sector (UMS) (1). This has, however, been presently constrained by the non-availability of data for the UMS for 2005-06 to permit a comparative analysis of the growth therein for the two time points (2).

Data Base & Methodology

The district level data used in the study are drawn from the state's BES (Bureau of Economics & Statistics) which collects them for the Annual Survey of Industries (ASI) of CSO. The data, published for 31 districts, have been reorganised by effecting two mergers to yield a data set of 29 districts (3) for the study. The methodology adopted comprises simple techniques/tools like: deflation, univariate/bi-variate frequency distributions, percentage growth rates, labour productivity ratios and elasticities. The analysis is based on data for four variables viz. number of units, employment, fixed capital and value-added. The two value based variables, fixed capital and value-added, are deflated (to base 1993-94) by using the all India Index for Machinery and Tools and Wholesale Price Index (WPI) respectively so as to enable temporal assessment of data over time. The growth rates4 have been calculated by using the trend method so as to have the advantage of taking into account each of the values in the time series as opposed to the point-to-point method which ignores the intermediate time values. The phenomenon of jobless growth is examined for its two profiles viz. the absolute and the relative gains/losses in employment in which the latter is examined with the 'per unit' values so as to reveal an average picture prevailing in the state (5). One commonly used method for assessing the changing levels of employment is to consider the change in employment elasticity (with reference to either value-added or capital) over time. The method, however, makes for meaningful interpretation when the growth rates in both the variables under consideration are positive; in other cases (i.e. when either of the two variables or both register negative growth rates) their interpretation is misleading, to avoid which one has to specify the different scenarios and appropriately classify the districts (6) into each. To accommodate all variants of this situation and help in arriving at a decision on the acceptance or rejection of the jobless growth hypothesis for the State, a classification of employment elasticity is made into five categories viz. (a) employment creating growth (in which both employment and output are positively growing), (b) employment displacing growth (i.e. employment growth is negative but GVA's growth is positive), (c) districts which are stagnating (i.e. both employment growth and GVA growth are negative), (d) employment creating but not with accompanied output growth (i.e. employment growth is positive but output growth is negative) and (e) districts registering not only positive growth in both employment and output but also that the employment elasticity is greater than unity (i. …

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