Essays on labour markets and inclusive growth in India

Abstract

The thesis is a set of four essays structured around the theme of labour markets and inclusive growth in India. In the first essay, we look at whether economic growth in India during the recent growth process, from 2004-05 to 2011-12, has been inclusive or not. Using National Sample Survey (NSS) data, we look at the growth in consumption expenditure during this period and define inclusiveness according to various standards, each capturing the ways in which the poor are performing with respect to the others. We consider a framework that would help us assess inclusiveness over a range of plausible poverty lines. In addition to providing the all-India picture, we extend the theoretical framework and look at the outcomes for various socio-economic sub-groups such as backward castes and classes. Further we also look at how the major states have been performing during this period. We find that for all-India as well as for various socio-economic sub-groups, the growth in the consumption expenditures of the poor is found to be lower than those of the middle and richer groups. This is also true of majority of the states, although there are certain exceptions. Thus, we find that the marginal increase in the living standards of the poor is not commensurate with the much better performance of the economy. newlineRecognising the inter-linkages between labour market outcomes and inclusive growth, in the second and third essays, we focus on the problem of unemployment in India. In the second essay, we propose an unemployment measure that takes into account the level as well as intensity of unemployment and satisfies several desirable properties, including sensitivity to the distribution of the unemployment burden. The latter property enables us to capture the distinction between the short-term and the long-term unemployed, which the conventional measures of unemployment, such as the unemployment rate, do not capture. We show that our measure can be decomposed into mean and distributional components and contributions to unemployment by