EDUCATION LEVELS AND SECTORAL DISTRIBUTION OF WORK FORCE:
AN ANALYSIS OF URBAN INDIA
Low levels of literacy and educational attainment, large gender disparity in enrolment, completed education and labour market participation are important features of the Indian Economy. Educational systems have developed out of social demands and have tended to follow social changes rather than to lead them. This is partly because of their nature. Common to all countries are four aspects of education which are basic to social, economic and political development. These are universal primary education, literacy and adult education, technical education and university education. The developing countries see these four factors as being fundamental to their achieving 'take-off'. Traditionally, economic theory has emphasized physical capital accumulation as the most robust source of economic growth, at least in the short-run, with exogenous technical change being the long-run determinant of growth. This literature has emphasized the importance of human capital as an endogenous factor of production to explain economic growth. Existing growth literature accepts education as one of the primary components of human capital since education, other than improving productivity of labour, has certain spillover benefits meaning that over and above benefiting the individuals who receive it, it also benefits society. Different education levels have a profound impact on economic growth. The most important concomitant of development is considered to be the movement of labour from agriculture to manufacture and from manufacture to services. Economic progress has been associated with ‘tertiarisation’ of the labour market. The tertiary sector being diverse in nature constitutes of various service generating activities and each of these sub sectors has a definite role in development. The services sector has in recent decades been performing much better than agriculture and industry in India and in many other developing countries as well. According to standard literature, services experience an accelerated growth only after a certain level of development in agriculture and then in industry. In this regard, the Indian experience is somewhat different. Even today India cannot be considered as an industrially developed economy. The employment growth of the tertiary sector has been dynamic and the interaction between occupational structure and development has interested economists for a long time. However, not much attention has been given, to theorizing the relationship between education levels and the tertiary sector. It is this relationship that the paper attempts to explore by analysing the interlinkages between the two. It is structured as follows: Section II reviews the related literature, Section III identifies the central question of the study, justifying the need to investigate the topic, followed by the objectives laid out, the data source and the methodology used. Section IV discusses the education levels and occupation structure in India. Section V analyses the relationship between the two. Section VI draws a comparison between two states, identifying the connection between the service activities or sub sectors and the education levels. Section VII concludes.
II. LITERATURE REVIEW
The theme of education and sectoral composition of labourforce is placed in perspective by reviewing the existing literature. Burton (1969) classifies education into four aspects- that are essential for the developing economies to “take off”. He thus relates the development of a country to its educational structure, highlighting the importance of different education levels for developing countries. Similarly, Self and Grabowski (2004) examine the impact of education on income growth in India by breaking education down into Primary, Secondary and Tertiary categories. The authors furnish evidence of the strong causal impact of...
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Mukherjee, D and Majumdar, M (2008) “Tertiarisation of the Indian Labour Market”, MPRA Paper No 12755, September
Narayanan, K (2003), “Socio-Economic Empowerment through ICT Education: A comparative Analysis of Maharashtra and Rjasthan in India”, Presented at Converges, International Conference on the convergence of Knowledge.
Prabhu,K.S and Sarkar, P.C
Self, S and Grabowski, R(2004) “ Does education at all levels cause growth? India, a Case Study”, Economics of Education Review, Volume 23, pp 47-55
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