ABSTRACT
This chapter starts by providing analytical underpinnings of the terms ‘jobless growth’ and ‘inclusive growth’ and by pointing out that a trade-off between employment and productivity growth is not inevitable. Cross-country data is used to examine whether economic growth in developing countries has been jobless. The data show that the relationship between employment and output growth, especially in manufacturing, has weakened over time, and that the elasticity of employment with respect to output has declined. It is demonstrated that a high rate of employment growth can be achieved without compromising on productivity and efficiency. The chapter argues that the pattern of economic growth in terms of sector and sub-sector composition of output is important from the point of view of the employment outcome of output growth. At the initial stages of development, high rate of growth of labour intensive manufacturing is important from the point of view of achieving structural transformation of an economy from labour surplus to full employment stage. The chapter concludes by bringing out the aspects of policy environment that are important from the point of view of promoting and supporting such a pattern of growth.
