What determines Manufacturing sector employment in India: Evidence from panel data?

By : Seema Joshi

Page No: 74-81

Abstract
Development economics literature provides contending hypotheses on whether the manufacturing or services sector is an engine of growth in developing economies. In the case of India, the services sector has become an engine of growth by ‘leap-frogging’- sidestepping the industrial sector which can have serious repercussion for the economy. Therefore, there is an urgent need to revive the manufacturing sector to sustain India’s growth rate in the medium and long term. With this background, the paper examines an important question: What determines manufacturing sector employment in India? In this paper the Random Effect Regression Model is applied on panel data for 20 states of India for three time periods i.e.1999-2000, 2004-05 and 2011-12 to identify the factors which can be expected to influence manufacturing sector employment. URB, FLFPR and SERVEMP were significant, emphasizing the importance of policies which promote urbanization, higher female labor force participation and service sector jobs.

Author :
Seema Joshi : Associate Professor of Economics, Department of Commerce, Kirori Mal College, University of Delhi, Delhi.
 

DOI: https://doi.org/10.32381/PROD.2020.61.01.8