Conference Themes

The guidelines on the conference themes are suggestive only. The prospective paper writers may contribute on other relevant sub themes as well. Apart from contributions on India, conceptual papers or those relating to other regions/ countries are also welcome.


Contrary to expectations, a long period of economic growth has not significantly lowered informality in most of the economies of the developing countries, including India. The informal (or unorganized) sector’s share in total non-agricultural output (excluding “public administration and defence”) in India declined somewhat between 1980 and 1995 and then stopped declining. And the informal sector’s share in total employment (again excluding “public administration and defence”) hardly changed between 1955 and 2000 and then declined somewhat, but this decline was accompanied by growth of informal employment (i.e., employment that is not “regular wage employment with entitlements to non-wage benefits and social security”) in the formal sector.

Hidden behind these trends is the fact that the informal sector recorded impressive growth in India. This growth was associated with very significant structural change; the share of agriculture in informal sector’s output declined quite rapidly and the share of non-agriculture correspondingly increased. The structure of employment also changed; the share of agriculture in total employment declined while the share of non-agriculture increased. These changes were accompanied by significant increases in labour productivity and labour-incomes (real wages and incomes of the self-employed). In short, employment conditions in the informal sector have improved quite substantially. Since informal wage employment in the formal sector is generally better than informal wage employment in the informal sector, it can be said that the quality of informal employment has improved significantly.

These developments have thus far been barely noticed by many analysts and researchers, who simply assume informal employment to be ‘bad’ and unchanging in character by definition (and hence not worthy of investigation). Consequently, our knowledge of how informal labour markets work and of how the character of informal employment has been changing is pitifully poor.

This is the backdrop that has prompted the selection of “Informality, and labour markets” as a major theme for the ISLE Conference of 2017. Papers containing empirical analysis at macro or micro levels on the issues relating to this theme are welcome. Some of the sub-topics on which papers may be submitted include:


High economic growth rates in recent decades in India have not been matched by similar improvement in employment generation. Integration of employment promotion objectives with macroeconomic policies has been, in general, neglected. Macroeconomic policies, relating to fiscal, monetary, trade, tariff and exchange rate, have direct and indirect impacts on the generation of employment, both in terms of quantity and quality. During the reform period of the early 1990s, emphasis was given on fiscal and financial stability , as well as on disbanding the hitherto state-led approaches to growth, and on providing greater space to markets and the private sector. The essence of the stabilization reforms rested on targeted reductions in budget and current account deficits, inflation and the debt-GDP ratios. It was generally argued that the liberalization and structural adjustment reforms undertaken since early 1990s would remove the ‘rigidities’ and factor price distortions in the economy, and that it would change the industrymix and increase the demand for labour coming from the shift to labour intensive products based on comparative advantage. However, the experience so far shows that the expectation has not materialized or at best has been mixed. India deviated from following a strict reforms path influenced by so-called Washington Consensus.

Although the primary objectives of macroeconomic policies are aimed at controlling inflation, sustaining public expenditure and attaining fiscal balance, but these policies through fiscal and monetary policies have significant impact on employment. In order to influence employment, fiscal policy has to improve tax revenue and public investment on infrastructure and other supply constraints. Monetary policy can help in reducing interest rates and raise low cost credit for agriculture, manufacturing and services.

Level and pattern of investment, both public and private, impact the level of employment. Do existing incentives for investment promote capital intensity? There is a spatial dimension to this too, in that investment is very concentrated regionally, and not in the places where employment deficits are greatest.

Another issue is changing pattern of factor shares. The increase in the profit share in organized industry is quite large, and unless it is reinvested could lead to shortfalls in aggregate demand. One issue is whether the overall level of demand management in the Indian economy is employment-friendly.

Trade liberalization has been associated with increased ratio of trade to GDP, improved export performance, and diversification towards manufactured and services exports. However, linkages of trade liberalization to employment are not straight forward. To the extent a country’s exports contain products with high labour content, employment can expand. However, if the pattern of growth is capital intensive, there may not be improvements in employment. Another issue is the impact of trade openness on wage gap between skilled and unskilled workers.

An appropriate tariff policy tailored to the requirements of economy in general and manufacturing in particular can raise employment. One view is that tariff rates in India are high in certain lines of production like electronic hardware, electrical equipments which are also labour intensive. China’s exports, on the other hand, represent the processing trade, with no tariffs charged on intermediate imports and the consequent promotion of a huge employment potential through the assembling of final products for exports.

Policy on foreign direct investment (FDI) and financial flows can influence employment generation. Over the years, there has been liberalization of FDI policy in different sectors. It can have both favourable and unfavorable impact on employment.

The papers on this theme may address some of the following issues:

The above issues are just illustrative and the prospective contributors might take up other relevant sub-themes as well.


Technological change has been the prime mover of growth since the time of industrial revolution. The advent of new general purpose technologies of the recent past have been leading to the emergence of a range of new economic sectors such as the information and communication technology, pharmaceuticals, biotechnology and nano-technology. New forms of aggregation of services in supply chain management, all based on technology and networking, are taking place in almost all sectors of the economy. Correspondingly conventional modes of production both in manufacturing and services are facing a threat of obsolescence with implications for employment and wages. Other sectors of the economy such as agriculture and construction have also been affected.

These global changes are emerging in India as well. India’s ranking in global innovation index has moved up to the 54th place by 2009-2013. As a share of total exports, India’s high tech exports have improved and are continuing their rise. Patents from India have increased and output per worker too has gone up of which roughly half is due to Total Factor Productivity Growth.

All these are dramatically changing the nature of work and skill requirements.Newer, but short term and flexible forms of employment are gaining at the expense of permanent regular forms of employment typical of the industrial era.New forms of employment are task based and independent of locations, and supported by new forms of employer-employee relations, management practices and changes in employment contracts. Work timings have become flexible with the arrival of outsourcing and home based work. Skill requirements are changing from the conventional models of singular career path towards newer forms based on poly-valence, reskilling and life-long learning. The fall in transaction costs has made it possible to adopt new pay packages linked to individual skills and performances. The course, content and spatial spread of these developments, and their overall impact on employment, wages and wellbeing of workers are aspects that remain to be studied in greater depth.

A related issue that needs to be explored is the relationship between technological change, productivity changes and wages. Technological change does lead to substantial rise in labour productivity, offering potentially large benefits to workers and their employers. Does it result in an improvement of wages, working conditions and living standards? What is the evidence on these aspects emerging from developing countries and India in particular? A rise in productivity without commensurate rise in wages can result in a declining share of wages in aggregate income. Capital augmenting technological change together with complementary use of skilled labour can end in widening wage inequalities and polarization of job quality. Studies on the OECD economies suggest that rising wage inequality and a declining share of wages in the gross value added are both linked to technological change. They point to the importance of studying the impact of technological change on wage rates, wage dispersion and labour share of output in developing countries, notably India, with a view to drawing the right lessons for policy making.

Some of the possible sub-themes on which the papers could be contributed include:

Emerging nature of work and skills

Labour productivity and wages

Quantitative and qualitative dimensions of employment under changing technology

Labour market institutions

The above suggestive sub-themes may be addressed in various sectors of the economy. Papers may also be contributed on the ongoing experiences of the developed countries and their lessons for developing countries such as India.

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