Impact of Special Economic Zones on Employment, Poverty and Human Development

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Working Paper No. 194

Impact of Special Economic Zones on Employment, Poverty and Human Development Aradhna Aggarwal
May 2007

Contents
Foreword........................................................................................................................i Abstract.........................................................................................................................ii

1. Introduction.............................................................................................................1

2. Human Development and Poverty Reduction Effects of Zones: An Analytical Framework ..............................................................................................................2

2.1 Employment Effects............................................................................................2

2.1.1 Direct employment generation...............................................................2

2.1.2 Indirect employment generation ............................................................3

2.1.3 Employment for Women.........................................................................3

2.2 Skill Formation (Human Capital Formation) Effects......................................4

2.3 Technology Upgrading Effects...........................................................................5

3. Are SEZ Effects Unambiguous? Review of the Literature ................................7

3.1 Direct Effects.......................................................................................................7

3.1.1 Employment Effects......................................................................................7

3.1.2 Skill (human capital) Formation Effects.....................................................12

3.1.3 Technology Transfer and Technology Creation Effects .............................13

3.2 Indirect effects...................................................................................................14

3.2.1 Indirect employment....................................................................................14

3.4 Data base for the Study.....................................................................................16

4. Human Development Effects in India: Major Findings....................................18

4.1 Employment Effects..........................................................................................18

4.1.1 Direct employment generation....................................................................18

4.1.2 Female employment ....................................................................................20

4.1.3 Migration ....................................................................................................22

4.1.4 Wages and Other Monetary Benefits .........................................................23

4.1.5 Social Security and Bonus Benefits.............................................................25

4.1.6 Working Conditions ...................................................................................25

4.1.7 Bargaining Power of Labour......................................................................31

4.1.8 Living Conditions........................................................................................34

4.2 Human Capital Formation Effects...................................................................36

4.2.1 Labour Training.........................................................................................36

4.2.2 Incentive Systems ........................................................................................38

4.3 Zones and Technology Management...............................................................39

4.3.1 Role of Technology in SEZs ......................................................................39

4.3.2 Technology...
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