Abstract
The two mainstream points of view regarding employment—the neo-classical view and the Keynesian system—remain silent on the possibility that employment growth plays a strategic and crucial role that it induces investment that is more productive and is responsible for technological progress. In this context, the paper tries to show that there is a third view of employment where the generation of more productive employment, reflecting new employment with higher money and real wages, induces the advanced growth processes. Such employment is an index of division of labour that supports further division of labour, forming the basis of a cumulative causation growth process as discussed by Young (Econ J, 38(152):527–542, 1928) and Kaldor (Econ J, 82(328):1237–1255, 1972). In this hypothesis, employment creation refers to new employment opportunities with higher specialization that commands higher wages and should permit higher returns to the firms. This new employment opportunities induce more investment (guided by increasing returns), providing more of such employment opportunities, and form the basis of a growth process that reflects developed status.
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Acknowledgements
The author is indebted to esteemed referees for suggestions and comments. An earlier version of the paper is: ‘Employment and Growth’, International Conference on Global Economic Crisis, Macroeconomic Dynamics and Development Challenges of Developing Economics, Centre for Jawaharlal Nehru Studies, Jamia Millia Islamia in collaboration with Indian Council of Social Science Research, February 2014.
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Padhi, S.P. Importance of Employment Growth: A Perspective on Technological Progress. Ind. J. Labour Econ. 61, 401–409 (2018). https://doi.org/10.1007/s41027-018-0135-2
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DOI: https://doi.org/10.1007/s41027-018-0135-2