Abstract
The sustained, even rising, levels of poverty and unemployment which have characterised much of the developing world over the past two decades have prompted studies in a variety of countries of the relationship between employment and the distribution of income. These studies have typically followed the pioneering work of the ILO missions led by Dudley Seers to Colombia and Sri Lanka in centring on the potential increases in aggregate employment which might accompany a redistribution of income in favour of the poor. Three separate influences are frequently distinguished. Because of the lower marginal propensity to import of the poor a redistribution of income in their favour brings a net switch of demand towards domestically produced output, with the familiar multiplier effects; in addition the reduced demand for imports for consumption may promote growth indirectly, by easing any balance of payments restriction on development programmes. Similarly, the lower marginal propensity to save of the poor raises income and employment through higher values of the multiplier, although in this case the dynamic effects may be adverse if growth is constrained by an inadequate volume of domestic saving. Thirdly, the dominance in the consumption patterns of the poor of food and ‘simple’ manufactured goods, produced by relatively labour-intensive techniques, results in the creation of more employment per marginal unit of expenditure. On this approach, therefore, the key elements linking employment to the distribution of income are the pattern of consumers’ demand at different income levels and the employment-intensity of the consumption baskets. The balance of evidence from such studies for a number of countries tends to confirm that a redistribution of income in favour of the poor will be associated with an increase in aggregate employment, although the estimated magnitude of the increase is typically small.1
An abbreviated and somewhat different version of this collaborative paper was presented to the Pune conference by Gopal Kadekodi.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Preview
Unable to display preview. Download preview PDF.
Bibliographical Note
International Labour Office, Matching Employment Opportunities and Expectations: A Programme of Action for Ceylon, Report and Technical Papers ( ILO, Geneva, 1971 )
Paukert, F., Skolka, J. and Maton, J., ‘Redistribution of Income, Patterns of Consumption and Employment: A Case-Study for the Philippines’, in Polenske, K. R. and Skolka, J. V. (eds), Advances in Input-Output Analysis ( Ballinger, Cambridge, Mass., 1976 )
Cline, W. R., ‘Distribution and Development: A Survey of Literature’, Journal of Development Economics (1975)
Foxley, A., ‘Redistribution of Consumption: Effects on Production and Employment’, Journal of Development Studies (1976)
Tokman, V. E., ‘Distribution of Income, Technology and Employment in Developing Countries: An Analysis of the Industrial Sectors of Ecuador, Peru and Venezuela’, World Development (1974)
Tokman, V. E., ‘Income Distribution, Technology and Employment in the Venezuelan Industrial Sector’, in Foxley, A. (ed.), Income Distribution in Latin America (Cambridge University Press, 1976 )
Morley, S. A. and Smith, G. W., ‘The Effect of Changes in the Distribution of Income on Labor, Foreign Investment and Growth in Brazil’, in Stepan, A. (ed.), Authoritarian Brazil: Origins, Policies and Future (Yale University Press, 1973 )
Cline, W. R., Potential Effects of Income Redistribution on Economic Growth (Praeger, 1972 )
Morley, S. A., and Williamson, I. G., ‘Demand, Distribution and Employment: The Case of Brazil’, Economic Development and Cultural Change (1974)
Ho, Y. M. ‘Income Redistribution and its Effects on Factor Demand in Taiwan: A Simulation Approach’, Southern Economic Journal (1976)
Chinn, D., ‘Distributional Equality and Economic Growth: The Case of Taiwan’, Economic Development and Cultural Change (1977)
Figueroa, A., ‘Income Distribution, Demand Structure and Employment: The Case of Peru’, in Stewart, F. (ed.), Employment, Income Distribution and Development (Frank Cass, 1975, reprinted from Journal of Development Studies, 1975 ).
Clark, P. B., ‘Intersectoral Consistency and Macroeconomic Planning’, in Blitzer, C. R., Clark, P. B. and Taylor, L., (eds), Economy-Wide Models and Development Planning ( Oxford University Press for World Bank, 1975 ); Manne, A. S., Multi-
Taylor, L., Macro Models for Developing Countries (McGraw-Hill, 1979 ).
Pyatt, G., Roe, A. R. and associates, Social Accounting for Development Planning; with Special Reference to Sri Lanka (Cambridge University Press, 1977 ).
see Adelman, I. and Robinson, S., Income Distribution Policy in Developing Countries: A Case Study of Korea (Oxford University Press for World Bank, 1978 )
Rodgers, G. B., Hopkins, M. and Wery, R.,Population, Employment and Inequality: BACHUE-Philippines (Saxon House, 1978)
Weisskoff, R., ‘Income Distribution and Export Promotion in Puerto Rico’, in Polenske, K. R. and Skolka, J. V. (eds), Advances in Input-Output Analysis (Ballinger, 1976 )
Weisskoff, R. and Wolff, E., ‘Linkages and Leakages: Industrial Tracking in an Enclave Economy’, Economic Development and Cultural Change (1977)
Ballentine, J. G. and Soligo, R., ‘Consumption and Earnings Patterns and Income Distribution’, Economic Development and Cultural Change, (1978).
Author information
Authors and Affiliations
Editor information
Copyright information
© 1983 International Economic Association
About this chapter
Cite this chapter
Sinha, R., Pearson, P., Kadekodi, G., Gregory, M. (1983). Poverty and Unemployment: Some Estimates for India of the Employment Implications of Income Redistribution. In: Robinson, A., Brahmananda, P.R., Deshpande, L.K. (eds) Employment Policy in a Developing Country A Case-study of India Volume 2. International Economic Association Series. Palgrave Macmillan, London. https://doi.org/10.1007/978-1-349-06646-9_7
Download citation
DOI: https://doi.org/10.1007/978-1-349-06646-9_7
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-06648-3
Online ISBN: 978-1-349-06646-9
eBook Packages: Palgrave Economics & Finance CollectionEconomics and Finance (R0)