ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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Employment and Wages in Manufacturing Industries-Trends, Hypothesis and Evidence

Employment and Wages in Manufacturing Industries Trends, Hypothesis and Evidence R Nagaraj The decline in registered manufacturing employment that took place in the 80s is widely believed to re/lea substitution of capital for labour, as the wage rate reportedly increased rapidly because of growing rigidities in the labour market How valid is this proposition ? Without getting into the analytical differences on the relationship between labour market behaviour and economic performance, this study examines the trends in wages, and (as a measure of labour market distortions) the power of organised labour. Reassessing the postulated relationship between earnings, capital intensity and employment, the study suggests an alternative explanation for the changes in employment.

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