Link between GDP growth
and employment in India
State of Working India
2023 (SWI) Report
India's focus on GDP growth has raised concerns about inadequate job creation.
Emphasizes the importance of distinguishing between regular-wage jobs and self-employment.
Highlights unequal distribution of GDP growth benefits.
Emphasized the disconnect between GDP growth and employment generation
Analyzes data from 1983 to 2023, emphasizing social identities like caste, gender, and religion.
Economic Growth
and Unemployment
Recent improvement in employment includes self-employment, not just formal jobs.
Quality of jobs matters, with many in self-employment lacking job security.
Employment elasticity (GDP-to-employment growth ratio) has consistently declined since the 1980s.
Women disproportionately affected.
Long-term data shows GDP and employment growth are uncorrelated.
Dominance of
GDP Growth
GDP Growth
Calculated via the least-squares method and represents the average change over a period.
It's measured using constant local currency values expressed in 1995 US dollars.
It may not match specific period-to-period growth rates.
GDP growth is the annual change in a nation's gross domestic product (GDP).
Political leaders use GDP growth promises to gain support.
Globalization trends reinforce the GDP-centric approach.
Historical, developmental, and policy factors influence this approach.
Limited social safety nets add to the emphasis on GDP for poverty reduction.
India's focus on GDP growth as a primary economic indicator.
Way forward
Support Micro, Small, and Medium Enterprises (MSMEs).
Formalize jobs and enhance job security.
Invest in skill development and training.
Implement gender-inclusive policies.
Promote labor-intensive manufacturing.
Factors Affecting
Employment elasticity depends on growth type.
Factors like labor market institutions, costs, tech progress, and sector composition influence employment and growth.
Economic growth can be extensive (increasing inputs) or intensive (raising productivity).