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Employment Elasticity in India and the US, 1977-2011
This paper analyses the phenomenon of jobless growth in India and the United States through the lens of employment elasticity. We decompose the level and change of aggregate employment elasticity in terms of sectoral elasticities, relative growth and employment shares. Estimates of these decompositions are presented with employment and output data from relevant sources for both economies. In India, the agricultural sector was the key determinant of both the level and change of aggregate elasticity till the early 2000s. In the US, the service sector is the most important determinant of the level, but manufacturing remains an important driver of changes in aggregate employment elasticity.
We thank the anonymous referee for helpful comments on an earlier draft. Debarshi Das would like to thank the Fulbright–Nehru Foundation for facilitating his visit to University of Massachusetts, Amherst, the United States.
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