Determinants of Employment of Non-Production Workers in Indian Manufacturing Industry: A Regression Analysis

Abstract

The owners of capital have an inherent tendency and interest to exercise effective control over the production process. This is considered necessary to maximize their profit in a given situation. The process of economic reforms as initiated since July 1991 on a firm and bold footing in India have facilitated the this process of increased control of owners of capital over the production processes through their representatives, the managers, professionals and technocrats. This behavior of the firms has changed the demand for non-production and production workers in a firm or industry. Using the ASI data at 2-digit level an attempt has been made in this paper to identify some important determinants which might have influenced the demand for nonproduction workers or skilled workers in Indian manufacturing industries. For this purpose the stepwise regression coefficients was estimated which have explained changes in the ratio of non-production to production workers (NP/P). It was observed that the variables identified as important determinants of changes in the relative demand for the non-production workers (skilled workers) in Indian manufacturing industries exert their influence in different directions and in varying degrees on a particular industry and across industries also. Hence the policies formulated and implemented to augment the level of productivity and employment should be industry specific under the broad industrial policy framework