Impact of Gross Domestic Product on Employment in India: A Pre-reform and Post-reform Comparison

Roopesh Kaushik


The article attempts to examine the impact of gross domestic product (GDP) on employment in India. It further testifies whether there exists structure stability in the employment among primary, secondary and tertiary sectors in the pre-reform and post-reform periods. Besides, the work depicts the overall employment scenario in India and explores various issues and problems related with rural employment in India. The article also discusses the status of labor in rural India and evolution of employment generation programs in rural India. Simple regression analysis and Chow statistics have been used to facilitate the analysis. A unit change in GDP in the primary sector is capable of bringing .80 unit of change in employment in the primary sector. Similarly, a unit change in GDP in the secondary sector brings about 3.05 unit of change in employment in the secondary sector. Besides, a unit change in GDP of tertiary sector is capable of bringing .499 unit change in employment in the tertiary sector. Result shows that there exists structural stability among primary and secondary sectors in the pre-reform and post-reform periods but tertiary sector shows structural instability for the aforementioned period. Secondary information has been gathered from National Sample Survey Organization, India (NSSO), Indian Council of Agricultural Research (ICAR) and various studies on employment in India.


Gross domestic product (GDP), Employment, Primary sector, Secondary sector, Tertiary sector, Reform period.

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