Job Polarisation in India: Structural Causes and Policy Implications

Abstract

Automation impacts employment and wage levels at the micro-level, and the structure of employment-shift at the macro-level. Job polarisation is defined as the automation of 'middleskill' jobs that require routine cognitive and manual applications while high and low-skill occupations are preserved. This paper examines the nature of job polarisation in India during the period 1983-2012 when Indian manufacturing was being gradually automated. The research uses disaggregated data from National Sample Survey Office and examines supply-side factors such as nature of employment growth in manufacture and presence of educated labour force which have not been adequately analysed before. The study has three observations. First, only the increased demand for high-skilled workers in the formal sector is due to skill-bias of technology conforming to theoretical expectation. Second, the transition of agricultural labourers has been to low-skill manufacturing sectors such as construction and textiles signalling distress in traditional manufacturing to provide employment. Third, oversupply of secondary and tertiary educated labour force has squeezed out middle-skilled workers from middle-skill jobs to relatively low-skill manufacturing and service occupations, explaining the persistence of routine occupations. The study concludes that increased demand for high and low-skill jobs has co-existed with the persistence of middle-skill jobs in India.

Job polarization and future of jobs in India

“…Whereas nonroutine task constitute low and high skill and automation has limited or complementary effect. [13] To conclude, As shown in above figure the impact of automation is different for different type of occupation.…”

Automation and Labour in India: Policy Implications of Job Polarisation pre and post COVID-19 crisis

“…Job polarisation owing to automation has been drawing increasing concern. Job polarisation linked to automation has been empirically observed in the USA (Acemoglu and Autor 2011;Jaimovich and Siu 2018); UK, Sweden and other European Countries (Petropoulos 2018); and even in developing countries such as Brazil and Colombia (Kuriakose and Iyer 2018). This confirmation of the worry over automation and job polarisation having been validated, scholars have been attempting to better understand this relationship.…”

“…Despite the foregoing discussion on automation and routine jobs, a development that deviates from job polarisation observed in other economies is that in India, routine jobs have managed to persist at a higher level than expected (Kuriakose and Iyer 2018;Vashisht and Dubey 2018).…”

Automation and Labour in India: Policy Implications of Job Polarisation pre and post COVID-19 crisis

“…Though the share of routine task intensive jobs in the aggregate labour has declined by almost 8% from 1995-2012(World Bank 2016, on a macroeconomic level, jobs comprising of routine manual tasks such as machine operators and routine cognitive tasks such as call-centres/sales have managed to occupy a share of the total employment above than levels observed in developed countries. Kuriakose and Iyer (2018) argue that the persistence of routine task intensive jobs in India is due to two reasons, neither of which are directly related to automation or technology. First, due to the increase in supply of educated labour (secondary and tertiary education) has resulted in labour oversupply.…”

“…As alluded to earlier, the acquisition of cognitive and analytical skills is shaped by group inequalities and issues of access to good formal education. In other words, cognitive task intensive jobs have usually been more resilient in India, and non-routine cognitive task intensive jobs have benefitted the most in India and throughout the world (Kuriakose and Iyer 2018;Vashisht and Dubey 2018). In general, individuals occupying these mid-to high-level jobs have had access to better formal sources of education, which have nurtured these skills.…”