[Reader-list] Re: Sarai Independent Fellowship Presentations
narender kumar thakur
narender224 at rediffmail.com
Tue Jul 8 20:42:18 IST 2003
Dear Ranita,
I am sending a copy of research proposal for synopsis of PhD, please mail it to reader-list.I need suggestions on it through reader-list.
I will be obliging your help.
With regards,
Narender Thakur
#224 Sutlej Hostel
JNU
· Globalisation of Indian Professional Manpower: Interlinkages between Education, Productivity and Migration
· Globalisation of Indiaâs Human Capital: Interlinkages between Education, Productivity and Migration
Introduction
Productivity is the key to maintain higher level of competitiveness and efficiency in an economy. In the present economic environment, the competitiveness and efficiency are potential indicators not only of economic development but also of human development as well, in the long run. According to the Global Competitiveness Report (1999), in terms of competitiveness index, India stands at 52nd position out of total 56 countries surveyed. Being the second largest country in terms of population, India is endowed with a vast labour force possessing a wide variety of educational qualifications and skills. However, in terms of average labour productivity, India is among the lowest, when compared with other developing economies. Further, in a forty-seven country ranking of brain drain and labour productivity, India stands on 42nd position and the GDP per employee per hour (average productivity of labour) is US$ 0.37 and in terms of purchasing power parity it comes to $2.15. These values are the lowest of total 47 surveyed countries (World Competitiveness Yearbook, 2000). These figures reveal that the labour productivity is significantly low in India. Not only in terms of absolute level of labour productivity but the growth rate of labour productivity is also low. As a result, the impact of low labour productivity (absolute value and its rate of growth) in India is getting worse over time. For instance, during the period 1986-1995,the growth of labour productivity per annum in Thailand was 9 percent, in China 7 percent, in Singapore 6.4 percent, in South Korea 6.4 percent, in Indonesia 6.3 percent, in Malaysia 5.8 percent .In India it was only 3.4 percent (Khader, 2002), which is quite low in comparison to the growth rates of these other developing countries in the region. On the contrary, few noted economists and government sources have estimated that the labour productivity has increased in the 1990s.Sundaram estimates the productivity on the basis of NSS 55th Round data for the year 1999-2000. These estimates reveal that all sectors of Indian economy have experienced 6 percent annual increase in labour productivity (GOI, 2002). These inter-source differences between the estimates on labour productivity may lead one to an indepth analysis of the parameters. It may be because of the methodological difference, for in India labour productivity is estimated as a simple ratio of âvalue added in outputâ to âtotal labour forceâ whereas the World Competitiveness Yearbook uses the ratio of âvalue added in GDPâ to âemployee work hoursâ (GDP per employee per hour), i.e., in the estimation of labour productivity, the World Competitiveness Yearbook included âtime factorâ (working-hours) also. This argument related to the inclusion of âtime factorâ or working hours of employee/labour force must be cross-checked by the declining figures of the work-participation rates in India as whole. Work-participation rate (WPR), which was quite low in the early 1990s declined further. For example, in 1993-94 at All-India (rural and urban) level it was 444 per thousand for the rural sector and 347 per thousand for the urban sector and came down to 417 and 337 respectively in 1999-2000 (NSSO, 2000). However, the formula used in the estimation of WPR is not capturing the ârealâ participation rate of workforce; it would be better if estimation is based on the parameter of âtimeâ factor. In other words, the real hours are devoted to the work by a worker can provide best estimate of work participation rate. However the problem of availability of data on work participation hourly basis is prevailed in India. World Competitiveness Yearbook (2000) applied this method in estimation of the GDP per employee per hour for a sample of 47 countries including India.
The low productivity in India as well as in other developing economies is a feature of their underdevelopment. The Indian economy is trapped by vicious circle of poverty even in recent years, due to various push and pull factors. After 55 years of independence from the clutches of colonialism, the poverty ratio in India remains at 26.10 percent in 1999-2000(NSS 55th Round). However, the estimates of poverty for 1999-2000 are not strictly comparable with earlier estimates of poverty because of the methodological differences (GOIL, 2002) . When compared in terms of human development index (HDI), Indiaâs rank is 115th in the total 162 countries (UNDP, 2001). Further, Human Development Report (1997) introduced the concept of Human poverty Index , in which India stands at very high rank, indicating the prevalence of vicious circle of poverty in the economy. The value of Human Poverty Index (HPI) of India is 34.5 in 1999 whereas value of HPI of Pakistan is 39.2 the rank of HDI is 127 in the same year. In the comparison of other developed economies, the Norwayâs rank of HDI is 1 and its HPI is 7.5 and the values of same indexes of Canada are rank 3 and 12.1 respectively.
The above discussion reveals that Indian economy is facing the problem of underdevelopment, more than one-quarter of its population is living under the poverty line, absolute labour productivity as well as its rate of growth is quite low so as the work-participation rate. Labour Productivity depends inter alia upon a number of factors, availability of other inputs, which are combined with labour in the production process, health, education and skill of workers, motivation for work and institutional set up. The two inputs, viz., capital and managerial skill when combined with labour in the required quantity raise its productivity substantially. The question is how to use the labour with other factors of production so that each and every factor of production can be used in a complement and efficient way to raise the average productivity of labour per hour. In other words, perfect complementary between factors of production results in the efficiency and high labour productivity in the pace of economic development. If India has to raise the productivity of labour, it will need to augment the level of education and health, work participation rates. Hence, there are clear linkages between the poverty of workers and work-participation rate, their health and skill, which determine the labour productivity. Therefore, the vicious circle of poverty is an important issue to be addressed for raising the productivity of labour, which in turn will determine the human as well as economic development.
Education and Productivity
Education enhances human capital formation in the economy, which determines the human development as well, particularly through qualitative improvement and efficiency of labour. In other words, education/training plays a very crucial role in labour productivity, which positively affects the human capital formation. The labour productivity as part of the âtotal factor productivityâ , also increase the value of total factor productivity. The productivity of labour is really important to be addressed in developing economies, which despite having huge surplus of labour are lingering with high poverty-ratio, low work-participation-rate, low literacy and inadequate services of health, water, electricity, sanitation etc. If quality and efficiency of surplus labour could be improved in developing economies, it would be proved a vital determinant of the human and/or social development. All the great classical economists, including Adam smith, Thomas Malthus, David Ricardo and, Karl Marx identified the role of labour in the production process in an economy. For instance, Adam Smith introduced the concept of increasing returns in the process of production in late 19th Century and the notion of increasing returns based on the division of labor. He explained that the division and specialisation of labor are the very basis of a social economy; otherwise everyone might as well be their own Robin Crusoe producing everything they want for themselves (Thirwall, 1997). Solow (1957) identified the share of human capital (technological progress) as an exogenous factor in the production function, which was left unexplained in earlier economic growth models. This unexplained share in the economic growth was identified as the contribution of human capital (investment in education/expenditure on education), which is termed as the residual factor of production function. Since 1950,it was a shift in paradigm of economic growth, i.e., shift of physical capital approach towards human capital approach. Schultz (1961) and Denison (1964) analysed the investment in education / human capital as an important factor of production function which results higher rate of economic growth in the economy. The capabilities acquired by human beings are also identified as a major endowment for economic development as well as human development (Drez, and Sen, 1999).
The Solow growth model shows that such persistent growth must come from technological progress. âBut where does technological progress come from? In the Solow model, it is just assumedâ (Mankiw, 2000). The âendogenous growth theoryâ or ânew growth theoryâ rejected the Solow modelâs assumption of exogenous technological change. Although the field of endogenous growth theory is large and sometimes complex, but a technological factor in production factor is clearly explained in this endogenous growth theory. Since the mid 1980s there has been an outpouring of literature and research on the applied economics of growth attempting to understand and explain the differences in the rates of growth of output and growth of per capita income across the world. In the ânewâ models of endogenous growth pioneered by Robert Lucas (1988), Paul Romer (1986,1990), and Jones (1998) assumed that the positive externalities associated with human capital formation, for example education /training and research development prevent the marginal product of capital from falling and the capital-output ratio from rising, and increase in the labour productivity through âefficiencyâ factor in production function which is in turn lead to high level of economic development. It is accepted that the human capital enhances economic development and the prevailing GDP-differentials between North and South are due to differences between the endowments of skill and education. Therefore the developed countries are investing more in education/training and research and development as compare to developing countries. Notwithstanding, developing countries are making substantial expenditure on education and other forms of human capital formation but they are still legging behind in comparison to their developed counterparts. For instance, India spends 3.8% of its GNP on education in 2000(MHRD, 2001) which is low as compare to other developed economies and few developing economies as well. Although the emigration of âfinished and semi-finished human capitalâ (professionals and students) overseas has minimised their expected benefits from educational expenditure to the economy which guide to low human capital formation .At the same time, a large number of professionals, e.g., IT professionals, doctors, nurses, engineers, teachers, and students etc. are migrating overseas more importantly for better remuneration package, better job opportunities and/or highly qualitative education/training. On the one side, emigration of professionals and students incurs huge loss of public resources and skill-transfer, which is called as âbrain drainâ. But on other side of this emigration raises the hope for remittances and return migration of professional with better-acquired skill and education/training, which could be used in national development. This kind of return migration and remittances can be proved a driving force in the process of economic development of India. However the issue to be addressed here is - whether the role of remittances as expected, is quite similar to the physical return migration for the national development of developing economies like India.
With physical return migration of professionals and students, an improvement in health and education in developing economies can be expected/formulated, which leads to more externalities and higher potentiality for human development. Because this type of national development will increase the living standard or quality of life and quality of work of remained masses of the home country. The use of âknowledge-bankâ (acquired by return and out-migrants) in the health and education standards in developing economies can raise the average productivity of labour or workersâ attitude towards high work participation rate. In the present phase of globalisation, the movement of natural persons is relatively free; emigration and return-migration of labour especially of professionals in developing economies like India have an important role to trickle-down for a big push in its national development.
Migration and Productivity
In the era of globalisation, the free movement of natural persons across borders is becoming easier as compared to earlier phases of economic development due to the minimizing/eliminating the economic boundaries of nation-states. In the presence of convenient and efficient means of transportation, flexible economic and migration policies of sending as well as destination countries, easy access for communication and information are important factors, which have been facilitated/availed the comparatively open environment for international mobility of capital and labour .The âexport-promotion policyâ is being implemented to promote the free mobility of labour in the global labour market along with international trade of goods and services. However WTO-GATS framework advocates the free movement of labour especially for immigration countries have more demand for professional manpower rather than semi-skilled and unskilled manpower. Moreover the globalisation of labour inherits itself the feature of less conditions for free movement of goods and services as well as free mobility of factors of production. The WTO-GATT framework demands the efficiency and productivity in the process of production. This framework argued that there is a need of competitiveness and efficiency in the âglobal villageâ. As witnessed from above discussion that developing economies including India inherit the problems of low productiveness and competitiveness. Besides having low productivity including low labour productivity, the developing economies like India are facing the problem of brain drain. Therefore drain of knowledge and free movement of goods and services and factors of production have posed a challenge for India, that how can it outweigh the cost of brain drain in the presence of free mobility of professionals under the guidelines of WB-IMF-WTO-GATT nexus. Therefore each and every economy is now under pressure to accept the diktats of these international economic giants of the free global market. In the context of high-poverty-ratio and high mobility of professionals , the economic policies are required to offset the problems of underdevelopment, which have cause-effect relationship with low work-participation and labour productivity. Therefore developing economies need to concentrate on productivity-issue of its surplus labour. It implies that the efficient and productive labour can raise the level of production as well as meet the need of time to increase the level of total factor productivity through increase in labour productivity and in the same time compete with in free-global market.
However the World Labour report (2000) admits that the benefits of globalisation are not reaching to enough people. The same document asserts that the increased global competition has led to the loss of job and temporary employment arrangement that are often less secure and provide fewer social benefits than regular jobs. Therefore the doubt has created whether globalisation of labour increase the average productivity or decline . The labour productivity gaps between the North and the South determine the income inequalities among the countries and poverty within the country. Moreover the impact of globalisation of labour need to be analysed especially, in case of India where âGlobalisation has created opportunities for some people, regions and countries that have not even dreamt of three decades ago. But, it has also contributed to increased impoverishment, inequality and insecurity for many othersâ (Nayyar, 2002).
In the perspective of international economics, Hecksher-Ohlin theorem (1933) states that the physical capital-rich country will have the comparative advantage in the production of capital-intensive goods and the labour-rich country will have the comparative advantage in the labour-intensive goods. However, Leontief (1953) refuted the Hecksher-Ohlin theorem on the basis of his study on US data for the year 1947 that US exports were less capital-intensive and more labour-intensive than US imports.. The reason behind the failure of this theorem that US has exported products those were more skilled labour-intensive than its imports as measured by average years of education. More recently, economists have attempted to test the Hecksher-Ohlin model using data for a large number of 27countries and 12 factors (Bowen et al., 1987). They also refuted the Hecksher-Ohlin theorem, on the ground of their empirical results and confirm that the developed economies, those are capital-abundant exporting skill- intensive goods and importing the capital-intensive goods. In other words that Leontief paradox accepted on a broader level and rejected the Hecksher-Ohlin theory . Leamer (1999) uses a variable factor to show the role of work-participation rate in the production function, which is known as âeffortâ into a traditional two sectors, and factors of Hecksher-Ohlin model of international economics. The empirical results proved, on the basis of data related to Japanese, US, UK economies, that âeffortâ enters in a production function as the total factor productivity because âeffort of a labourâ matters in the GDP growth.
Brain Drain, Return Migration and Productivity
The emergence of humanâcapital theory paradigm (1957) in late 1950s and comparatively flexible immigration policy of the US in 1960s were two important landmarks have affected the patterns of international migration. The advent of human capital theory encouraged the nation-states to enhance the proportion of their budgetary allocation/expenditure on education/training and investment in âhuman capitalâ has been recogonised as an important tool for economic growth. As a result of flexible immigration policy the US has emerged as an epicenter for the migration of highly skilled labour not only from the developed countries such as UK, Canada but also from the developing countries, viz., Mexico, India, etc. These factors led to a paradigm shift in international migration of professionals and technically skilled personnel across the countries, especially to the US. This paradigm-shift attracted a large number of semi-skilled and skilled professionals from India to US rather than UK (Khadria, 1999,2001). However in past, UK was an important destination country for Indian emigrants including professionals due to colonial bonding. (Khadria, 1990; Commander et al., 2002). Presently a large number of professionals and students are in the US for example 35 thousand to 45 thousand Indian were granted emigrant visas (i.e. Permanent residency) by the US Immigration and Naturalisation Service per year between 1996 and 1998 (Khadria, 2001). The presence of Indian IT professionals in Silicon Valley is familiar to all. About 3 percent of Indian doctors emigrated from India to the US in the 1980s. In addition, a large proportion of medical graduates, i.e., 56 percent in 1956-80 and 49 percent in the 1990s emigrated from AIIMS to the US (Khadria, 1999; The Economist, 2002). The emigration of such a large number of professionals was termed as âbrainâdrainâ for the country of origin, i.e., India, because it was the loss of financial resources to State exchequer (in terms of subsidies on higher education) as well as drain of human capital, i.e., productive potential. Many professionals are migrating to developed economies, after getting their education/training from the premier and quality educational institutions of medical sciences, management and technology, viz., AIIMS, IITs, IIMs, University of Delhi, JNU, BHU etc. The purposes of professionals to migrate are better remuneration packages, better job opportunities and other reasons etc. A study of the fiscal effects of the Indian brain drain, by Mihir Desai and two of his colleagues, point out that the 1 million Indians in the United States accounted for a mere 0.1% of Indiaâs population but earned the equivalent of a staggering 10% of Indiaâs national income . However, the loss of the skilled and educated may do more harm than emigration in general because this type of finished and semi-finished human capital includes higher social cost in terms of national skill-wastage and fiscal resources of sending economy.
Different economists have suggested some solutions to offset the cost of brain drain to source country. Jagdish Bhagavati suggested in 1970s that a rational-tax-system must be levied on the professionals and students who are leaving the home country to compensate the brain drain. But it is pending work for the policy-makers to frame for such a tax proposal for professionals or students staying abroad. A policy framework suggests that the cost of brain drain can also be minimised if destinations economies finance the education of professionals, which they have demand for professionals in their economies (The Economist, 2002). This type of policy would at least eliminate the fiscal loss of sending countries of professionals. No country now tries to stop its people from leaving in the global-world and human-freedom cannot be restricted or prohibited. A few, such as China, lean heavily on the families of students studying abroad to ensure that return. However, WTO-GATS through the clause of mode4 related to natural movement of persons also emphasized on the temporary-migration, even developed economies are framing their immigration polices towards temporary-migration friendly. It is an important proposition to anlayse that developed countries are controlling and diverting their economic and immigration policies in favour of temporary migration (7 years of stay â maximum limit in destination country). If developed counties are limiting the permanent migration of professionals and other occupational workers, the return of professionals could be beneficial to developing countries in terms of their role in enhancing the productivity and efficiency of labour in the country of origin. However, a contradiction/dichotomy has emerged from this temporary-immigration policy undertaken by developed countries and GATS. The dichotomy has emerged between the laws of nation that restrict the movement of people across borders and the economics of globalisation that induces the movement of people across borders. (Nayyar, 2000)
In the âglobal villageâ, an economy cannot bear the cost of being isolated itself from the international economy. It would be very expensive for such an âisolatedâ economy to maintain an adequate level of relationship with in the changing scenario of international economy. In the framework of WTO-regime, each and every player (economy) has to play in the âgameâ (free international economy) to try to its fate for comparative gain or win over other player(s) (countries). In the framework of GATS-movement of natural persons mode 4, mobility of labour cannot be restricted with in the economic boundaries of nation-state. It is interesting to examine that temporary migration is an emerging phenomenon rather permanent migration in the arena of international mobility of skilled professionals or service providers. Migrants today increasingly come from poor counties, and their stay in the host counties is becoming shorter (UNESCO, 1999). However, poor countries are not the only ones affected by outward migration. There are some developed countries, which lose their manpower, for example, professionals from Australia and Canada are migrating to the United States (The Economist, 2002). Developed economies also find the problem of brain drain as; skilled immigrants use them as entrepot countries, acquiring citizenship and education before moving on to the largest and richest job market in the world. A separate class of visas in GATS framework (GATS visa) has been established for service professionals who are temporarily working overseas. The GATS visa would facilitate comparatively free international mobility of labour mainly the mobility of professionals (Chanda, 1999). The emphasis on the temporary migration can offset the cost incurred in the brain drain of developing economies. In other words, such type of migration may lead to âbrain gainâ through âbrain exchange and/or brain circulationâ in terms of âhigher probability of return migrationâ of service providers who have potential âknowledge-bankâ acquired from the experiences and on- the- job training overseas. The challenge before the developing economies including India that in what way an outflow of skilled workers bring a reward in the terms of remittances and most importantly physical return migration of professionals .The professionals who have acquired âknowledge-bankâ which they gained in the highly technological, efficient, productive and competitiveness environment of the developed countries.
However it is a necessary condition for the economic development that return migration of skilled labour must take place but sufficient condition would be the use of acquired-skill/training in overseas in raising the level of productivity of remained masses of the home country.
Formulation of Research problem
The low average labour productivity and work participation rate determine the Indian underdevelopment. However surplus of labour is an important characteristic of Indian economy. But the Indian skilled labour is performing efficiently in global labour market, which is precipitating for higher demand for Indian professionals overseas. There is a significant role of Indian semi-finished and finished human capital in developed economies like US, UK, Australia etc. As trends of migration, a large number of skilled mobility from India has taken place in the past and is still prevailing. This phenomenon incurs huge losses in terms of wastage of fiscal resources as well as skill-transfer from India due to the large-scale emigration of persons belonging to the category of brain drain. In the era of globalisation, free movement of natural persons (or service providers) cannot be restricted to the boundaries of nation-states. A challenge is there before the Indian economy, to rationalize the policies (economic and migration) to ensure the contribution of skilled labour in the national development. The emigrated skilled labour has the potential of increasing productivity, competitiveness and efficiency that can be used a main driving force to boost the pace of economic development of India.
Therefore an issue is to be addressed here on the role of Indiaâs migrant professionals to raise labour productivity, which can offset possible adverse effects of skilled mobility and even leverage the flow into positive outcomes for source countries. The problems of underdevelopment are severely prevailed in India, viz., and the general level of education, health of the population. The low literacy and inadequate health services have a cause-effect relationship with poverty and eventually it guide low work-participation rate. Low levels of skills and work- participation rate maintain average levels of productivity, which in turn hinder national development and welfare. A long-term strategy is required to promote the economic and human development of developing countries. It is not only a question of retain and return their highly skilled manpower but also make them to offset the cost of brain drain in India, i.e., brain gain for national economy. The migrants themselves can play an important role in this task of national development through their remittances; networks and their physical return-at least temporarily-to exchange their skills and contribute towards economic and human development. The research problem can be written in the following equation as under:
Q
L =f (K, L, E, Mo, Mr, R, Ep, WTO-gats)
Q/L-Average Productivity of Labour
Q-Production Level,
L-Labour,
K-Capital,
E-Effort, (Efficiency)-Work Participation Rate
Mo- Out-Migration,
Mr- Return, Migration,
R-Remittances,
Ep-Economic Policies,
WTO-Clause of Most favoured Nation for Movement of Natural Persons
Objective of the Study
The major aim of the present study is to find out the interlinkages between education, productivity and migration in the context of globalisation of Indiaâs human capital. For the sake of clarity and precision the above-mentioned aim can be stated in terms of the following specific objectives:
1. To identify the parameters of average productivity of labour in India.
2. To find out the impact of New Economic Policy, 1991 on average productivity of labour in India.
3. To find out the impact of out-migration of professionals on average productivity of labour in India.
4. To find-out the impact of educational background of migrant professionals on average productivity of labour in India.
5. To find out the impact of return migration of professionals on average productivity of labour in labour.
6. To identify and anlayse the kinds of policies which are being formulated and implemented to increase the average productivity level in India and in other countries.
7. To identify the economic policy framework in the phase of globalisation of labour for developing economies.
8. To identify the forms of remittances are significantly useful to increase the average labour productivity
Research Questions:
1. What are the parameters of average productivity of labour in India?
2. What is the impact of New Economic Policy 1991 on the average labour productivity in India?
3. What is the impact of out-migration of professionals on the average labour productivity in India?
4. What is the impact of educational background of migrant professionals on average productivity of labour in India?
5. What is the impact of return migration of professionals on average productivity of labour in India?
6. What kinds of economic-policies are being formulated and implemented to increase the average productivity level in India and in other country?
7. What is the economic-policy framework in the phase of globalisation of labour for India?
8. What forms of remittances are significantly useful to increase the average labour productivity?
Important Terms and Concepts
Labour Productivity
The term expresses the degree to which labour is utilized effectively. Labour Productivity is the sum of use values produced (products or material services) per worker employed in production. It is generally calculated with reference to some unit or time (hour, day, month, or year). Generally output per man-hour is used as a measure of productivity in view of, and as approximation to, output per unit of total input, because the latter is not available or cannot be calculated within a reasonable margin of error.
Labour Force (Economically Active Persons)
Labour Force is defined as the total persons working (or employed) and seeking or available for work (unemployed). The group of persons within a minimum and maximum age group willing to be engaged in some economic activity. Thus, both the employed and unemployed within a specified age and time period constitute the labour force.
Migration
Migration implies the geographical movement of individuals or groups of individuals. Thus migration is a form of across specified boundaries (i.e., between on geographical unit and another) generally involving a change of residence from the palace of origin or the place of departure to the place of destination or the place of arrival with the object of establishing a new permanent residence. It is of two kinds- international migration (or migration between counties) and internal migration (or migration within a country).
Occupational Classification
Systematic grouping of occupations- of each group or sub-group representing an aggregation of specific tasks. Some of the standard occupational classifications are: International Standard Occupational classifications (ISCO)-1966 and 1988, International Labour organization), National Classification of Occupational (NCO) 1958 and 1968(DGE&T) India; Standard Occupational classification (SOC) 1958(CSO) India. The NCO, 1968 gives classification of occupation in 5 digits-in 3 digit families and 2-digit groups, there by implying that the more detailed the level of sub-division, the more homogeneous will be the content of occupation in a family or group from the point of view of âtype of work performedâ. An Occupational Division is essentially a convenient basis for combining homogenous group of occupations. In the NCO, 1968 for example there are 8 Divisions, further classified into 95 groups, 462 families and 2,464 occupations. The Occupational Divisions are as follows:
01- Professional, technical and related workers.
02- Administrative, executive and managerial workers
03- Clerical and related workers.
04- Sales workers
05 Service workers
06- Farmers, fishermen, hunters, loggers and related workers.
07,08&09- Production and related workers, transport equipment operators, labourers. X- Workers are not classified by Occupations
Participation Rate
The number of persons in working age expressed as a percentage of the total population. The term is generally used in conjunction with labour force. The labour force participation rate (LFPR) is the percentage of population in the labour force (either employed or unemployed) at a given period of time. The age-specific participation is the percentage of population in different age groups of the labour force to the total population in corresponding age- groups.
Professionals
The term refers to persons who apply in a professional activity the scientific knowledge and methods to a variety of technological, economic, social, industrial and governmental problems. This category includes such persons as scientists, engineers, architects, physicians dentists, professors, economists, and statisticians, who are characterized by their long formal education and training.(IAMR)
Professionals are people with high levels of education, experience and qualifications whose skills are in demand everywhere and can move from country to country, temporarily or permanently, as immigration laws are not restrictive for them. Transnational corporations employ most of them. But some of them circulate in their professional capacities or through systems of education and research. (Nayyar, 2000)
Work Participation Rate
Total Employed persons/Total Labour force
Work participation rate is defined as the proportion of workers in the population In other words, percentage of workers to the total population.
Workforce Participation Rate
It can be defined as the number of persons/person-days employed per thousand persons-days is referred as the work-force participation rate (WFPR) or the worker population ratio (WPR). According to NSSO 55th Roundâ document, of the three approaches, the usual principal status approach is best suited as a measure of economic activity in an economy with seasonal fluctuations in the employment. This because, in this approach the criteria used is the pattern of activities followed by the person for a relatively long period of time. By considering also persons with some subsidiary employment, certain transient component of employment is also netted in.
Need of the Study
The present study will focus on the average productivity and globalisation of labour and their impact on economic development of India. In the era of globalisation, comparatively free movement of the factors of production, viz., and capital and labour is minimizing/eliminating the economic boundaries across the countries. The movement of natural persons has also been dealt by the WTO and its constituent agencies/organizations such as GATS, which are now emphasizing on the temporary-migration of service-providers. Most of the immigrant nations of the developed world are trying to limit the number of permanent immigrants However, in order to reverse the impacts of brain drain, developing economies are making efforts to gain from the export of skilled labour particularly in terms of remittances and investment in education, health and other important sectors of human and social development. Indian Prime Minister also speaks, in the Indian Science Congress, that there is a need of bringing-back the Indian âbrain-bankâ staying overseas, for the process of rapid national development of India. The endogenous growth theory of economics of development in 1990 explained that human capital is an important factor to raise the level of average productivity. Leontief Paradox (1953) also analysed that US economy gained from the export of high-skilled labour-intensive goods.
Because of the lower work participation rate and comparatively very low levels of average productivity of labour in India, Indian migrants professionals are vital factors to be analysed and formulate the national economic policies on the base of these constraints. Several studies have estimated the âtotal factor productivityâ of indusial sector especially in manufacturing sector (Mitra and Goldar, 2002; Mitra 1999: Golder 1992; Ahluwalia 1991; Goldar 2001, Agrawal 2002). But they have not estimated average productivity per employee per hour, which is very crucial to improve the work participation rate and low average productivity of Indian labour. Indian economy as a labour abundant country must concentrate on average labour productivity per hour along with other levels of factors productivity. As a whole there is no concentration on GDP/employee per hour-productivity of labour. All these above mentioned facts and assertions provide a need to evolve the role of Indian emigrant professionals in the process of economic development of India.
Research Methodology
The present study will use both macro and micro empirical methods. The macro empirical analysis will be based on the available primary and secondary data on the level of value-added output in different-industries/sectors, labour force, workforce, stock and flow data of professionals as occupational and educational classification level (ISCO-1996/1997 and NCO-1967). Further, the secondary data of international migration of professionals and remittances will be collected from different Indian and international sources. Besides, various policy documents and annual reports of the concerned agencies of India, Countries of Indian Emigrants Professionals and WTO, WB etc. will be looked into. The information for this study will be collected from following documents (the data/information each document contains is given along with the source):
· Census of India 2001,1991-Stock data of number of professionals in India from Economic Tables (Division 0-1 and 2)
· NSSO-Different round surveys on Employment and Unemployment-Stock data of Work participation rates and labour force in India.
· Annual Survey of Industries. Value-added Output in different industries of India (NIC-1987)
· Reports and Documents of Ministry of Human Resource Development, Ministry of External Affairs, Ministry of Labour, Indian Council of Cultural Relations, IAMR, Planning Commission, Reserve Bank of India- Stock and flow data on employment, education and migration. Report on Currency and Finance of RBI will provide stock and flow data on remittances of NRIs.
· Reports and Documents of IMF, WTO, WB, GATS, GATT, UNCHR, IOM, UNCTAD. - Stock and flow data, and literature of Indian professionals, conditions and policies of GATS, WTO, IMF etc. for India
· Reports and Documents of National Productivity of Council, Asian Productivity Council. â Data and literature related Labour Productivity of India and of other countries as well.
· Censuses of Different Countries of Immigration. -Data on Indian immigrant professional and students.
For the micro empirical study-sample survey, the information will be collected on different dimensions of return migrant professionals and their possible role in the economic development of India, including increasing the average productivity of labour. The target group of the sampleâsurvey will be migrant IT and medical professionals. The sample size will be 100. The information is to be collected with self-prepared questionnaire. On the basis of our micro-sampleâsurvey we will extrapolate our results with the results of macro-secondary data based study.
Tentative Chapterisation
Chapter-1: Introduction
§ Globalisation of Labour and Productivity
§ Education and Productivity
§ Migration and Productivity
§ Research Methodology
§ Review of Literature
Chapter-2: Globalisation of Human Capital: Migration of Indian Professionals
· Interlinkges between Education and Labour Productivity in India
· Interlinkges between Migration and Labour Productivity in India
Chapter-3: Labour Productivity in India: Affecting Factors and Economic Reforms
§ Return migration and Labour Productivity
§ Out migration and Labour Productivity
§ Remittances and Labour Productivity
§ Work Participation Rate
§ New Economic Policy, 1991
Chapter-4: Micro-Sample Survey on migration of professionals: Macro Vs. Micro Analysis on Labour Productivity in India.
§ Differences and Similarities between results of Macro-Sample Survey and Macro-Secondary data based Analysis
Chapter-5: Concluding remarks:
· Conclusion and Summary
· Policy Implications and Suggestions
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