Inter-Temporal Analysis of Employment Elasticity in India

Abstract

The study analyses the impact of real GDP growth rates on employability in India for the period 1950-2020. The GDP growth rate is adjusted for price changes to ensure that the economy is growing without any distorting effect of inflation. The CAGR (Compound Annual Growth Rate) approach and regression approach are used for the calculation of employment elasticities. It is found in the analysis that there is acceleration in GDP growth rate in India i.e. 5.08 per cent average for the mentioned period. Further slight improvement is noticed in the growth rate of employment of India around 1.7 per cent.  It is also perceived that Indian economy is showing considerable growth but employment has not grown alongside. The empirical results show that India has 0.39 per cent ability to create employment opportunities for its population in the process of its growth and development.