Globalization, Employment and Mobility

Transcription

1 Globalization, Employment and Mobility

2 Other titles from IDE-JETRO: Mariko Watanabe (editor) RECOVERING FINANCIAL SYSTEMS China and Asian Transition Economies Daisuke Hiratsuka (editor) EAST ASIA S DE FACTO ECONOMIC INTEGRATION Hisayuki Mitsuo (editor) NEW DEVELOPMENTS OF THE EXCHANGE RATE REGIMES IN DEVELOPING COUNTRIES Tadayoshi Terao and Kenji Otsuka (editors) DEVELOPMENT OF ENVIRONMENTAL POLICY IN JAPAN AND ASIAN COUNTRIES Masahisa Fujita (editor) REGIONAL INTEGRATION IN EAST ASIA From the Viewpoint of Spatial Economics Akifumi Kuchiki and Masatsugu Tsuji (editors) INDUSTRIAL CLUSTERS IN ASIA Analyses of Their Competition and Cooperation Mayumi Murayama (editor) GENDER AND DEVELOPMENT The Japanese Experience in Comparative Perspective Nobuhiro Okamoto and Takeo Ihara (editors) SPATIAL STRUCTURE AND REGIONAL DEVELOPMENT IN CHINA An Interregional Input Output Approach Akifumi Kuchiki and Masatsugu Tsuji (editors) THE FLOWCHART APPROACH TO INDUSTRIAL CLUSTER POLICY Masahisa Fujita (editor) ECONOMIC INTEGRATION IN ASIA AND INDIA

3 Globalization, Employment and Mobility The South Asian Experience Edited by Hiroshi Sato and Mayumi Murayama

4 Institute of Developing Economies (IDE), JETRO 2008 Softcover reprint of the hardcover 1st edition All rights reserved. No reproduction, copy or transmission of this publication may be made without written permission. No paragraph of this publication may be reproduced, copied or transmitted save with written permission or in accordance with the provisions of the Copyright, Designs and Patents Act 1988, or under the terms of any licence permitting limited copying issued by the Copyright Licensing Agency, 90 Tottenham Court Road, London W1T 4LP. Any person who does any unauthorized act in relation to this publication may be liable to criminal prosecution and civil claims for damages. The authors have asserted their rights to be identified as the authors of this work in accordance with the Copyright, Designs and Patents Act First published 2008 by PALGRAVE MACMILLAN Houndmills, Basingstoke, Hampshire RG21 6XS and 175 Fifth Avenue, New York, N.Y Companies and representatives throughout the world PALGRAVE MACMILLAN is the global academic imprint of the Palgrave Macmillan division of St. Martin s Press, LLC and of Palgrave Macmillan Ltd. Macmillan is a registered trademark in the United States, United Kingdom and other countries. Palgrave is a registered trademark in the European Union and other countries. ISBN ISBN (ebook) DOI / This book is printed on paper suitable for recycling and made from fully managed and sustained forest sources. Logging, pulping and manufacturing processes are expected to conform to the environmental regulations of the country of origin. A catalogue record for this book is available from the British Library. Library of Congress Cataloging-in-Publication Data Globalisation, employment and mobility : the South Asian experience / [edited by] Hiroshi Sato and Mayumi Murayama. p. cm. Includes index. 1. Labor market South Asia. 2. Labor supply South Asia. I. Sato, Hiroshi, 1943 II. Murayama, Mayumi, 1961 III. Ajia Keizai Kenkyujo (Japan) HD A6G dc

5 Contents List of Tables List of Figures Acknowledgements Notes on the Contributors vii xi xii xiii Introduction: Globalization and Employment in South Asia 1 Hiroshi Sato and Mayumi Murayama Part I Dissecting the Changes in the Workplace 29 1 Job Loss and Job Opportunities of Factory Workers in Ahmedabad: Flexible Labour Rethink 31 Junko Kiso 2 Female Garment Workers in India and Bangladesh in the Post-MFA Era 62 Mayumi Murayama 3 Competitiveness of the Garment Industry in Pakistan with Particular Focus on Piece Rate Workers 94 Momoe Makino Part II Employment: Law and Policy Reforms Economic Liberalization and Labour Law Reform in India 127 Hitoshi Ota 5 Labour Law Reform in Sri Lanka: Revision of the Termination of Employment of Workmen Act and its Implications 150 Etsuyo Arai 6 Social Dimension of Employment Policy in India: Indian Debate on Employment Reservation in the Private Sector 176 Hiroshi Sato Part III Employment: Assessing the Regulatory Effects Labour Demand in India s Textile and Garment Industries: a Comparative Analysis of the Organized and Informal Sectors 199 Takahiro Sato 8 Effects of the Minimum Wage Regulations on Employment Level and Efficiency: Evidence from the Ready-Made Garment Industry in India 228 Yoshie Shimane v

6 vi Contents Part IV Migration, Employment and Well-Being Migration and Well-Being at the Lower Echelons of the Economy: a Study of Delhi Slums 263 Arup Mitra and Yuko Tsujita 10 The Impact of Labour Migration on Household Well-Being: Evidence from Villages in the Punjab, Pakistan 281 Hisaya Oda Index 313

7 List of Tables A.1 Basic socio-economic indicators I 15 A.2 Basic socio-economic indicators II 15 A.3 Size of labour force in four countries 17 A.4 Labour force participation rate 17 A.5 Unemployment rate 20 A.6 Underemployment rate 21 A.7 Distribution of employed persons by employment status 23 A.8 Distribution of employed population by main industry Net changes in employment figures in the organized sector Employment status of those usually employed in urban areas and main cities from 1987/88 to 2004/ Number of respondents by the 1991 worker categories and 1991 factory sizes Activities, employment status and employment security in Percentage distribution of respondents by net earnings level in 1991 and Breakdown of job changes between 1991 and Employment status of employed persons in Employment security of employees in Number of job changes between 1998 and 2006 by the 1991 worker categories and operating/closed factories Breakdown of job changes by the 1991 worker categories between 1998 and Changes in respondents perception of their living standard between 1998 and 2006 by the 1991 worker categories Employment size of factories Age distribution Distribution of main language Marital status Education level Duration of stay in city Mode of migration Reason for migration First year of factory employment Present position of workers System of payment Wage levels Major garment exporters in the US and the EU markets Value-wise share of textile and garment products in total Pakistan exports Overview of international garment exports Major exporters of cotton garment products to the US 98 vii

8 viii List of Tables 3.4(a) Wages in the garment sector (1996): comparison with GNP per capita (b) Wages in the garment sector (1986): comparison with GNP per capita Outline of interviewed garment manufacturing companies Monthly wages in Pakistan garment manufacturing companies Percentage of female sewing operators in Pakistan garment manufacturing companies Number of production workers interviewed Average monthly wages of production workers by type of work and payment system (a) Reasons for preferring piece rate status (b) Reasons for preferring fixed salary status Turnover rate of sewing operators Reason for shifting from the previous company to the current company Information sources: how a job was found Education level of the workers interviewed Training type before joining this company Difficulty of firing and firing costs Share of GDP by sector Share of employment by sector Labour force status of the household population Economic indicators before and after liberalization in Sri Lanka Unemployment rates in Sri Lanka Job demand in newspapers, Jan. Oct Average annual growth rates of the textile and apparel industries in different sectors Sector-wise share of value added generated by textile and apparel industries Production of fabrics in different sectors Exports of textile and textile products Exports of textile and apparel products to principal countries Principal non-primary industries employing workforces Principal industries employing women workers State-level Job Security Regulation ( JSR) Index Descriptive statistics of main variables in organized sector Estimated labour demand equations of textile and apparel industries in organized sector Estimated dynamic labour demand equations of textile and apparel industries in organized sector Descriptive statistics of main variables in informal sector Estimated labour demand equations of textile and apparel industries in informal sector Estimated labour demand equation including industrial disputes Garment industry in major states in the fiscal year Scheduled employments in central/state/union territories and the range of minimum wages as of 3/12/96 232

9 List of Tables ix 8.3 Minimum wages for the ready-made garment industry Growth rate of employment and man-days Summary of variables in SFA estimation Testing specifications of production function Primary results of estimation Characteristics of the garment industry in major states in the fiscal year Results of estimation accommodating state effects Summary of variables in DEA estimation Estimated efficiencies Effect of minimum wage on efficiency estimated from DEA Effect of minimum wage and wage level on efficiency estimated from DEA Percentage of population below poverty line and mean monthly household income Percentage of workers below poverty line and average income by occupation Percentage distribution of workers as per monthly income classes Monthly per capita household consumption expenditure Regression results: dependent variable: household-specific PCE Bionomial logit model with marginal effects Results of factor analysis based on household data Distribution of households as per well-being index Household-specific well-being index and duration of migration Key statistics of sample households and study villages Incidence of migration at the household level Incidence of labour migration at the individual level Destinations of internal migrants Destinations of external migrants Age distributions of migrants and non-migrants Duration of migration Age distribution of internal and external migrants at the time of migration Literacy rates and schooling of migrants Household size and migrants Households without active adult male Landownership and labour migration Landholding size and labour migration Summary of remittance data Amount of remittances during the past 12 months and duration of migration OLS estimates of workers remittances Use of remittances by recipient households Income per adult equivalent by migration status, stratified by poverty categories (farm households) Income per adult equivalent by migration status, stratified by poverty categories (non-farm households) 301

10 x List of Tables Income per adult equivalent of non-migrant households with/ without returned migrants, stratified by poverty categories (farm households) Income per adult equivalent of non-migrant households with/ without returned migrants, stratified by poverty categories (non-farm households) School enrolment by migration status Logistic regression of the effects of remittances on school enrolment A.1 Current migration status of sample individuals A.2 Current migration status of sample households 308

11 List of Figures 1.1 Working registered factories and workers employed daily in Ahmedabad city, Perceptions of changes in living standard as of Monthly net earnings by the 1991 worker categories in Caste composition of respondents by the 1991 worker categories Educational level by the 1991 worker categories in Value of monthly imports of men s knit shirts (MFA category 338) Annual growth rates of real GDP at factor cost by industry of origin Compensation calculated by formula Phase diagram The effect of the permanent change in exogenous variables on labour demand and shadow price of labour The effect of the permanent change in adjustment cost on labour demand and shadow price of labour Technical and allocative efficiencies 236 xi

12 Acknowledgements This book is the result of a research project entitled Globalization in South Asia: Its Impact on Employment and Labour Issues. The project was conducted through the Institute of Developing Economies (IDE-JETRO) between 2005/6 and 2006/7. During the course of these two years, researchers benefited from the unlimited help of numerous people and organizations, both in Japan and in South Asia. Though every individual cannot be cited, we are very grateful to all who provided their assistance. The overall two-year project included four overseas joint research projects in India, Pakistan and Sri Lanka. Smooth coordination of these efforts would have been impossible without the efficient and considerate administrative support provided by Kumiko Sakumoto and Kyoko Miura at IDE-JETRO. As our research project neared completion, it was the timely support and arrangements made by Masahiro Okada at IDE-JETRO and Alec Dubber at Palgrave Macmillan that led to publication of the results of this research in its current form. Mami Ishigaki and Noriko Wakabayashi at IDE-JETRO took much trouble to arrange the editing of English in the manuscripts. We would like to thank them and also the English editors who spent substantial time and effort not only in correcting sentences but also clarifying our ideas. We certainly appreciate the invaluable comments given by anonymous referees both inside and outside IDE-JETRO. Although their suggestions have been incorporated where possible, contributing authors are, of course, responsible for remaining errors and any shortcomings. Comments on this book will be most welcome, and we hope that both the book and subsequent discussion will lead to further research with an even wider group of people in the future. HIROSHI SATO MAYUMI MURAYAMA xii

13 Notes on the Contributors Etsuyo Arai is a Research Fellow at IDE-JETRO. She has done postgraduate work at Peradeniya University, and her current research interests include economic and social transformation in Sri Lanka. She is the author of Sri Lanka: Community Consultants in an Underdeveloped Welfare State (in Shinichi Shigetomi (ed.), The State and NGOs: Perspective from Asia, Institute of Southeast Asian Studies, 2002). Junko Kiso is currently Professor in the Faculty of Global and Inter-Cultural Studies at Ferris University in Japan. She has been a visiting scholar at Jawaharlal Nehru University in India, and her main areas of interest are in development and labour studies in South Asia. She has contributed to scholarship in these areas with extensive publications and is author of Labour in Indian Development: Structure and Changes in Urban Labour Market (2003, in Japanese). Momoe Makino is a Research Fellow at IDE-JETRO. Her current research interest concerns how the creation of employment has been used to alleviate poverty in South Asia. She is the author of Pakistan Labor-Intensive Industry Struggling against Chinese Products: a Case of Footwear Industry (in Ajia Keizai, Vol. 47, No. 6, in Japanese). Arup Mitra is Professor of Economics at the Institute of Economic Growth, Delhi. His research interests are in issues relating to urban development, labour and welfare, industrial growth and productivity, and gender differentials. His earlier works include Occupational Choices, Networks and Transfers: an Exegesis Based on Micro Data from Delhi Slums (2003) and Urban Development and Urban Ills (with Edwin S. Mills, 1997). Professor Mitra was the winner of the prestigious Mahalanobis Memorial Medal in Mayumi Murayama is a Senior Research Fellow at IDE-JETRO. Her main areas of interest include gender and development issues in South Asia and Japan, and regional relationships in South Asia. Recent publications include Gender and Development: Japanese Experience in Comparative Perspective (editor, 2005) and Borders, Migration and Sub-Regional Cooperation in Eastern South Asia (in Economic and Political Weekly, Vol. 41, No. 14, 2006). Hisaya Oda is a Senior Research Fellow at IDE-JETRO and visiting Professor in the Graduate School of Tokyo University of Foreign Studies. He also serves on the editorial boards of Developing Economies, Ajia Keizai and the Journal of Humanities and Social Sciences. His research interests include the economic growth of Pakistan and migration issues in South Asia. He is the author of a number of research papers, xiii

14 xiv Notes on the Contributors and his recent article Dynamics of Internal and International Migration in Rural Pakistan: Evidence of Development and Underdevelopment appears in Asian Population Studies (August, 2007). Hitoshi Ota is a Research Fellow at IDE-JETRO. He specializes in labour economics, industrial relations and human resource management. His published work includes the article Flexible Work Organisation, Human Resource Practices and Worker Perception in India: a Case Study of Bangalore City (in Indian Journal of Labour Economics, Vol. 48, No. 1, 2005). Hiroshi Sato is former Director of the Area Studies Department at IDE. His research interest is in the current politics and political history of South Asia. Earlier works include Uneasy Federation. The Political Economy of Central Budgetary Transfers in South Asia (1994) and Social Security and Well-Being in a Low-Income Economy: an Appraisal of the Kerala Experience (in The Developing Economies, Vol. 42, No. 2, 2004). Takahiro Sato is an Associate Professor in the Research Institute for Economics and Business Administration at Kobe University. He was a visiting scholar at the University of California, Berkeley, and his main area of interest relates to economic development issues in India. He is the author of Development Economics: India s Economic Reforms in the era of Globalization (2002, in Japanese). Yoshie Shimane is a Research Fellow at IDE-JETRO. She is currently a scholar affiliated with the Institute of Economic Growth in India, and her research interest lies in industrial development in India, especially in the accumulation of technology and its spillover into indigenous firms. Her earlier works include How Inter- Firm Linkage Enhanced the Growth of the Automobile Industry in India (in Ajia Keizai, Vol. 40, No. 8, in Japanese) and India s Motorcycle Industry: Indigenous Two-Wheeler Manufacturers and the Development of Capability among Indian Components Suppliers (in Yuri Sato and Moriki Ohara (eds), Asia s Motorcycle Industry: the Rise of Local Companies and the Dynamism of Industrial Development, 2006, in Japanese). Yuko Tsujita is a Research Fellow at IDE-JETRO. Her major research interests include the social sector, labour, and urban development in India. She is currently completing her Ph.D. at the University of Sussex, and her dissertation is entitled The Impact of Education on the Poverty of Urban Slum Dwellers in Delhi, India.