Impact of Trade on Labour Markets in the Unorganized Sector in India

Rashmi Banga and Seema Bathla

in Growth, Development, and Diversity

Published in print June 2012 | ISBN: 9780198077992
Published online September 2012 | e-ISBN: 9780199081608 | DOI:
Impact of Trade on Labour Markets in the Unorganized Sector in India

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This chapter analyses the impact of trade on employment in the informal sector of India’s manufacturing sectors. The analysis is based on data for the year 2005–6, for as large a number as 81,000 enterprises at the 3-digit level of industrial classification, covering 66 industries across 25 states. One of the main findings of the chapter is that forward and backward linkages between the organized and unorganized manufacturing sectors do exist, but these are prominent mostly in the states where the export orientation of industry is considerable. Also, the favourable employment-generating effects of trade are much more significant in the case of relatively large enterprises employing more than six workers. The chapter also suggests that increased imports in the post-liberalization era may have destroyed jobs in the manufacturing sector. It concludes with suggestions for promoting employment in the manufacturing sector.

Keywords: employment; unorganized sector; manufacturing sector; informal sector; imports; industry; labour market

Chapter.  8815 words. 

Subjects: Economic Development and Growth

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