Inter-regional occupational disparities in Indian manufacturing sector with regards to socioeconomic labour attributes

ABSTRACT

Favouritism and discrimination reduce labour force diversification while driving unequal growth. The incidence of these practices increases the probability of securing employment for some people irrespective of their individual capabilities, leading to non-inclusive growth. In India, employment in certain sectors is determined by the personal, familial, social, cultural, and demographic traits of individuals. This study attempts to analyse how the socio-economic attributes of individuals affect their employability in a particular sector or kind of work, with a special focus on the Indian manufacturing sector. The study utilises unit-level data from the fourth (2013–14) and fifth (2015–16) rounds of the annual Employment and Unemployment Surveys (EUS) by the Government of India. Logistic regression analysis was undertaken to analyse employment probabilities in the manufacturing sector. We found that location and caste are more important than education and gender in determining an individual’s probability of gaining employment in the Indian manufacturing sector. The overall results from the model show that all the selected independent variables have a significant impact on the probability of getting jobs in the manufacturing sector.

KEYWORDS:

• Employment distribution
• occupational choices
• labour market discrimination
• labour attributes
• Indian manufacturing

Acknowledgments

The research facilities provided by our parental institute IIT Indore were crucial for completing this study. We also thank to Mr. Jadhav Chakradhar, Assistant Professor at CESS Hyderabad for his valuable suggestions and comments throughout the completion of this study. We also express our sincere thanks to the Library of IIM Indore and ISEC Bangalore for allowing us to access the important research material for this study.

Disclosure statement

No potential conflict of interest was reported by the authors.

Correction Statement

This article has been republished with minor changes. These changes do not impact the academic content of the article.

Notes

1. Indian agriculture has been facing the problem of disguised unemployment, where excessive people are employed. It is highly dependent on rain water, which frequently leads to losses for farmers. Also, the Indian economy is undergoing a structural transition where it is shifting its output and employment from the agriculture to manufacturing sector.

2. The service sector too employs people of both lower and higher education, but it has greater employment probabilities for more highly educated and skilled people. This can be inferred by comparing the employment probabilities of the manufacturing sector with the agriculture and service sectors. In this regard, it shall be noted that only 9.7% of the total Indian population has an education level of graduation and above graduation (column 8, Table 2).

3. The people with an education level above high school are called skilled people (Cubas et al. 2016). However, in this context, skilled individuals are those who have some kind of specialisation that will aid them in handling a particular work to earn their livelihood.

4. Caste or social categories mainly persist in Indian society, where this caste is decided on the basis of birth (Agrawal 2014). After birth, one has to live and die in the caste one was born into (Ambedkar 1944). The Indian Constitution classifies all the castes into four broad groups, that is, Scheduled Castes (SC), Scheduled Tribes (ST), Other Backward Castes (OBC), and General Castes. In the Hindu social system, STs and SCs are considered as outcastes who were denied any kind of tangible or intangible assets, such as land, house ownership, education, skills, etc. OBCs are also considered backward people, but they were/are supposed to directly serve society, so are treated better than SCs and STs (Ilaiah 1996). The category which dominates over SCs, STs, and OBCs is the so-called General/Other category (Gang et al. 2012). The people of this category control all the wealth, education, and power in the country and have historically exploited SCs, STs, and OBCs (Dom 1999). The caste system has weakened after Independence of India, but it continues to exist extensively. As per the 2011 Census, the share of SCs, STs, OBCs and the General category in India is 18%, 9%, 39% and 34%, respectively. The official caste statistics are denoted in the column (7) of the Table 2, derived from the data of the fifth round of the EUS without applying weights.

5. Access of quality employment in India is measured by the employment situation index (ESI), which shows how each state and zone varies from each other in terms of the labour participation rate, percentage of casual and regular labour, percentage of self-employed below poverty line, average wage of casual labourers, etc.

6. This zonal classification is done by the Government of India through the State Reorganisation Act, 1956. It has been done by considering the cultural, geographical, and demographic diversity of each Indian state, where the six zones are as follows: East, West, North, South, Northeast and Central India (see Figure 1).

7. The people who were exploited, slaved, oppressed, and discriminated over centuries were denied the rights of money and education. Such people still struggle while dealing with issues related to money, education, authority and business.

8. In this study, all the communities/castes listed in the SC and ST category of the Indian Constitution are denoted as lower castes. They are highly vulnerable in social and economic terms when compared with the OBC and General castes.

9. ‘Weight’ in the EUS database terminology refers to the particular weightage given to the sampled data to make it representative of the overall population (Gang et al. 2012). The weights are assigned on the basis of the population of each of state. Its application is required while reporting the descriptive statistics, but not while working on regression estimations.

10. The Constitution of India defines Scheduled Tribes in Article 366 (25), which states that STs are those who have primitive traits, a distinctive culture, geographical isolation, shyness of contact with the community at large, and have backwardness.

11. Postgraduates have the least share in total manufacturing employment, so this study has taken it as the base variable.

12. The major Indian states are all the Indian states except the seven inion territories, that are Daman & Diu, Dadra and Nagar Haveli, Delhi, Chandigarh, Puducherry, Lakshadweep, and the Andaman & Nicobar Islands. As they are miniscule in geographical area and economic contribution, we have excluded them from the category of major Indian states.

Additional information

Funding

The authors have not received any funding for completion of this study

Notes on contributors

Arun Kumar Bairwa

Arun Kumar Bairwa is pursuing his PhD in Economics at Indian Institute of Technology (IIT) Indore, India. His research interest mainly deals with inclusive growth, employment generation, labour policy and industrial reforms. He was earlier working as an Academic Associate at Indian Institute of Management (IIM) Indore, India.