India’s Labour Productivity Puzzle

Basole, Amit and Jayadev, Arjun (2026) India’s Labour Productivity Puzzle. Working Paper. Azim Premji University, Bengaluru.

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Abstract

This paper documents that despite relatively robust output growth, India has experienced a marked and puzzling slowdown in labour productivity over the last decade. This we argue, is partly because of a intensification in dualism. While employment rates have risen, across most kinds of occupations, there is a proportionately greater shift toward self-employment and informal activities (especially among women), which are lower productivity sectors. Overall we document a sustained reversal in labour reallocation toward lower-productivity sectors, especially towards agriculture. We show that this pattern is unusual in international perspective. Sectoral, household, and gender-based evidence indicates that rising per capita incomes have been sustained through labour intensification despite stagnant or declining earnings per worker. An additional and puzzling fact is that there has been a decline in labour productivity.

Item Type:	Monograph (Working Paper)
Authors:	Basole, Amit and Jayadev, Arjun
Document Language:	Language English
Subjects:	Social sciences > Economics > Labor economics Social sciences > Economics > Production Social sciences > Economics > Macroeconomics & related topics
Divisions:	Azim Premji University - Bengaluru > University Publications > Centre for the Study of the Indian Economy (CSIE)
Full Text Status:	Public
URI:	http://publications.azimpremjiuniversity.edu.in/id/eprint/7504
Publisher URL:	https://azimpremjiuniversity.edu.in/

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