Technological Change and Growth of Employment in the Organised Manufacturing Industries in India

During both, the pre-liberalised and liberalised peiods, only the variables -- rate of growth of double deflated real value added (GRRVA) and rate of growth of product wage (GRPWG) -- had the expected positive and negative effects, respectively, on the rate of growth of employment (GREMP). The higher rate of growth of employment after liberalisation resulted largely because of increase in GRRVA and decline in GRPWG. Rate of growth of the ratio of index of material input to product price (GRRMP) had no influence on GREMP during either period. The rate of growth of total factor productivity (TFPG) had an indirect positive influence on GREMP through its influence on GRRVA, and a negative influence on GREMP through its influence on GRPWG. The higher TFPG during the pre-liberalised than that during the liberalised period indicated that technological changes, as reflected by growth of TFP, had plausibly a greater indirect effect on GREMP through its effect on GRRVA and GRPWG during the pre-liberalised than during the liberalised period.