Impact of labour attributes and probability of employability in Indian labour market: A sectoral analysis

• Date: 01 November 2019
• Author: Arun Kumar Bairwa,Pritee Sharma
• DOI: http://doi.org/10.1002/pa.1959
• Published date: 01 November 2019

ACADEMIC PAPER

Impact of labour attributes and probability of employability in

Indian labour market: A sectoral analysis

Arun Kumar Bairwa |Pritee Sharma

School of Humanities and Social Sciences,

Indian Institute of Technology Indore, Indore,

India

Correspondence

Arun Kumar Bairwa, Research Scholar‐

Economics, School of Humanities and Social

Sciences, Indian Institute of Technology

Indore, Simrol, Indore 453552, India.

Email: arun.cuk@gmail.com

The structural transition of an economy helps the nations to move from primary to

secondary and then to tertiary sector for the total output and employment genera-

tion. However, the absence of this systematic structural transition could lead the

nation into long‐term imbalances for employment and output. This is happening with

India as its economy has directly moved from primary to tertiary sector for both out-

put and employment generation. The present study helps to identify the main reasons

about why India is still stagnating with its sluggish primary sector for employment

generation. This will also show the existing pattern of occupational choices for the

people of different labour attributes. The study usages the fourth and fifth survey

of employment and unemployment conducted by the Labour Bureau in 2012–13

and 2014–15 over 1,087,968 individuals of India. The study applies both multinomial

logit model and binary logit model for analysing the employment probabilities of the

individuals for working in the primary, secondary, and tertiary sectors. The study finds

that location and education are the most important factor affecting the employment

choices of the individuals, whereas caste and gender are also important but with

moderate impact. The location is found crucial factor for primary and secondary sec-

tor occupation, whereas secondary sector is neutral in this regard. The service sector

is found to have the highest incidences of caste discrimination and favouritism in the

labour market. The education has the highest impact on the service sector jobs.

1|INTRODUCTION

The structural transition of economies helps people to move from

lower to higher productive economic sectors for employment. This

positively impacts the economy as the overall productivity and output

increases during this transition period. However, this structural trans-

formation cannot occur unless there is proportional support of factors

of production in the economy. Therefore, adequate availability of cap-

ital and labour is essential to shift an economy from primary to sec-

ondary and then to tertiary sector for both output and employment

generation. Here, the Indian economy is mainly dependent on the pri-

mary sector for employment generation and on tertiary sector for out-

put generation. This leads to a problem of “missing middle”where the

manufacturing sector is neither contributing in output creation nor in

employment generation. The missing middle problem has been well

addressed from the output and production point of view, but not from

the side of employment generation. Here, there is need of a study that

considers the socio‐economic factors of the labour, and then analyses

the peoples' occupational choices for all the three economic sectors—

that is primary, secondary, and tertiary sectors. The analysis of eco-

nomic sectors with regard to labour attributes is essential for the

developing nations like India, which are highly diversified in terms of

society, religion, region, language, culture, climate, education, and gen-

der. This higher level of diversities promotes discrimination, nepotism,

and favouritism in the labour market, where the intensity of this

unequal distribution of labour varies over regions, castes, genders, reli-

gions, languages, race, marriage, education, health, family background,

and so forth (Aggarwal, Johnes, Freguglia, & Spricigo, 2010;

Baah‐Boateng, 2016; Banerjee, 2016; Marelli & Vakulenko, 2016;

Schioppa & Lupi, 2002). The increasing level of diversity on the basis

Received: 1 April 2019 Accepted: 2 April 2019

DOI: 10.1002/pa.1959

J Public Affairs. 2019;19:e1959.

https://doi.org/10.1002/pa.1959

© 2019 John Wiley & Sons, Ltd.

wileyonlinelibrary.com/journal/pa 1of10