The Evolution of India's Industrial Labour Share and its Correlates

Bibliographic Data

ID5153349
AuthorsArjun Jayadev (0000-0002-0729-1213), A Narayan (0000-0001-9600-7511, Bryan College, corresponding author)
Year2020
Volume51
Issue4
Pages998-1017
Publication date2020-07-01
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueDevelopment and Change (JOURNAL)
Journal identifiersISSN: 0012-155X • E-ISSN: 1467-7660
PublisherWiley (PUBLISHER • GB)
DOI10.1111/dech.12587
OpenAlexW3042099232
LanguageEN
Citations received2
References cited28

There has been substantial recent interest in the decline of labour shares across many countries. For the most part, attention has been focused on developed countries. This article examines the evolution of India's labour share in its formal industrial sector from 1983 to 2016. Using two datasets corresponding to sectoral aggregate data and plant-level data respectively, the authors document a secular decline in the labour share across all sectors from 1983, with a stabilization at very low levels (around 8 to 10 per cent) starting around 2007. The plant-level data are used to identify correlates that illuminate reasons for the overall decline in the labour share. The authors find strong evidence to support multiple causes, including increased capital intensity, greater informalization, greater privatization, and productivity increases in larger firms; they therefore suggest that the declines in labour share experienced are due to a composite set of factors. Conversely, other potential explanations (such as regional variation in the labour share) have less explanatory power

Capital (architecture) · Demographic economics · Development economics · Economic growth · Economics · Explanatory power · Geography · Labour economics · Productivity · Wage · Wage share · Economic Theory and Policy · Global trade and economics · Labor market dynamics and wage inequality

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