International Trade and Manufacturing Employment Outcomes in India: A Comparative Study

The Indian economy has observed significant trade reforms since the mid 1980s, and the Indian manufacturing sector has rapidly increased its integration with the world economy. In this paper, we ask the question: did the increased trade integration create or destroy jobs in the Indian manufacturing sector? We attempt to answer this question by employing a variety of methodological approaches ? factor content, growth accounting and econometric modelling. We also compare India?s employment outcomes with four other countries ? Bangladesh, Kenya, South Africa, and Vietnam ? where similar methodological approaches were used. We find that the impact of international trade on manufacturing employment seems to be similar to those found for the two African countries ? Kenya and South Africa ? rather than the two Asian countries ? Bangladesh and Vietnam. Thus, the overall effect of international trade on manufacturing employment has been minimal, a surprising result for a country with an apparent comparative advantage in labour-intensive manufacturing goods, and a large excess supply of unskilled labour.international trade, manufacturing, employment, India

PRIVATE SAVING IN INDIA AND MALAYSIA COMPARED: THE ROLE OF FINANCIAL LIBERALIZATION AND EXPECTED PENSION BENEFITS

In this paper, we provide a comparative account of the evolution of private saving in India and Malaysia, and analyze how policy changes in the financial sectors and pension systems help explain differences in their saving performance. Using the ARDL bounds estimation procedure, we find a fairly robust long-run relationship between private saving and its determinants in both countries. Consistent with the predictions made in the life cycle model, our results indicate that higher income growth stimulates private saving and an increase in age dependency retards private saving. The results provide some support for the hypothesis that financial liberalization results in lower private saving in both countries. The evidence also indicates that expected pension benefits tend to stimulate private saving in India, but that the reverse is found in Malaysia.private savings; pension saving; financial liberalization; India; Malaysia.

Helping India’s informal manufacturing sector to grow

India’s informal manufacturing sector is dominated by small household enterprises that keep everything within the family – but these firms are often the least productive. Why aren’t these small enterprises making the changes needed to bloom and grow? This column asks whether the problem is access to finance and what can be done about it

International trade and manufacturing employment outcomes in India: A comparative study

The Indian economy has observed significant trade reforms since the mid 1980s, and the Indian manufacturing sector has rapidly increased its integration with the world economy. In this paper, we ask the question: did the increased trade integration create or destroy jobs in the Indian manufacturing sector? We attempt to answer this question by employing a variety of methodological approaches - factor content, growth accounting and econometric modelling. We also compare India's employment outcomes with four other countries - Bangladesh, Kenya, South Africa and Vietnam, where similar methodological approaches were used. We find that the impact of international trade on manufacturing employment seems to be similar to those found for the two African countries - Kenya and South Africa - rather than the two Asian countries - Bangladesh and Vietnam. Thus, the overall effect of international trade on manufacturing employment has been minimal, a surprising result for a country with an apparent comparative advantage in labour-intensive manufacturing goods, and a large excess supply of unskilled labour

What a long, strange Trip it’s been: Reflections on India’s Economic Growth in the Twentieth Century

The purpose of this paper is to situate India’s recent economic growth in the long sweep of the twentieth century and to understand what is different about the contemporary growth experience from earlier episodes. The paper argues that most interpretations of India’s growth acceleration tend to privilege one dimension of the growth experience over another, and that the causes of India’s growth suggest a more complex causal story and that no single perspective can provide a convincing explanation of India’s growth phenomenon. The paper also argues that in contrast to the previous growth success stories of the developing world, especially those originating from Asia, India’s pattern of growth has followed a non-standard route that privileges knowledge-intensive services and capital-intensive manufacturing over labour-intensive manufacturing, which is not in India’s long-term interests, either from viewpoints of efficiency or equity

Does the institution of State Business Relations matter for Firm Performance? – A study of Indian Manufacturing

This paper examines the role of the external institutional environment captured by effective state-business relations on firm performance. By effective state-business relations, we mean a set of highly institutionalized, responsive and public interactions between the state and the business sector. We find that effective state-business relations have had a discernible positive impact on firm performance in Indian formal manufacturing for the years 2000-01 and 2004-05. We also find internal and external institutional factors are complementary to firm performance - smaller firms, firms in urban areas, older firms and firms in simpler organizational forms benefit more.State business relations; firm productivity; manufacturing sector; India

What determines the share of labour in national income? A cross-country analysis

Recent evidence on functional income distribution suggests that the shares of capital and labour in national income vary considerably both over time and across countries. Specifically, there seems to be a general reduction in the labour share around the world, in particular from the mid-1980s onwards. Using fixed effects regression methods on a panel dataset covering 89 countries - both developing and developed - over the period 1970-2009, this study examines the mechanisms underlying the variability in the labour share. In particular, it focuses on the relationships between the labour share and measures of international trade and technological change. The results are robust across different specifications, for yearly data as well as 3- and 5-year averages, and after performing instrumental variable estimation. They suggest that trade openness and technological innovation have a positive and significant effect on the labour share. However, Foreign Direct Investments inflows and mechanisation seem to be negative drivers. Moreover, other factors, such as the level of economic development, education, and the strength of the regulations in the labour market, seem to also significantly influence functional distribution of income

Adaptively Parallel Processor Allocation for Cilk Jobs

The problem of allocating processor resources fairly and efficiently to parallel jobs has been studied extensively in the past. Most of this work, however, assumes that the instantaneous parallelism of the jobs is known and used by the job scheduler to make its decisions. In this project, we consider different ways of estimating the parallelism of jobs during runtime, as well as different ways of using this information to allocate processors in a fair and efficient manner. The goal of our project is to design and implement a dynamic processor-allocation system for adaptively parallel jobs. Adaptively parallel jobs are jobs for which the number of processors which can be used without waste—in other words, the parallelism of each job—varies during execution. We call the problem of allocating processors to adaptively parallel jobs the adaptively parallel processor-allocation problem. We propose to investigate the adaptively parallel processor-allocation problem for jobs running on a shared-memory multiprocessor (SMP) system. We focus on the specific case of parallel jobs that are scheduled with the randomized work-stealing algorithm, as is used in the Cilk multithreaded language (later, we will expand the scope of our research to include other kinds of parallel jobs). Our problem can be defined as follows: Consider an SMP system with P processors and J jobs. At any given time, each job has a desire dj, representing the maximum number of efficiently usable processors, and an allotment mj, representing the number of processors allocated to it. Our problem is to design a processor-allocation system that achieves a fair and efficient allocation of processors among these jobs, where the terms “fair” and “efficient” are defined as follows: an allocation is fair if whenever a job receives fewer processors than it desires, then no other job receives more than one more processor than this job received (the allowance of one processor is due to integer roundoff); an allocation is efficient if no job receives more processors than it desires and, if there exists a job that receives fewer processors than it desires, then all P processors are in use. The successful design of such a system can contribute significantly to our understanding of the adaptively parallel processor-allocation problem. If the task of estimating processor desires is designated to the jobs themselves—and if algorithms are devised to perform this estimation for different types of parallel jobs—then the system can easily be generalized into a core scheduling service provided by the kernel. In addition, the system can be extended to respect the job priority mechanism supported by the kernel, or to take into account processor usage histories when making the allocation decisions. Moreover, we can consider other ways of characterizing the fairness and efficiency of processor allocations beyond the definitions we have provided above. Currently, the prototype of the processor-allocation system we are developing is a user-mode extension to Cilk that uses the steal rate of Cilk jobs to estimate processor desires and a randomized, pair-wise exchange of processors to achieve a fair and efficient allocation. The prototype has a well-defined interface and a modular architecture, allowing us to investigate different desire-estimation and processor-allocation algorithms without too much difficulty.Singapore-MIT Alliance (SMA