Glossary term
Jobless Growth: Meaning and Definition
Reviewed and approved by Dr. Anamika ShrivastavaPublished Last updated
Jobless growth is a situation in which the economy’s output grows without a corresponding growth in employment. It means that production rises because of higher productivity, capital intensity or technology, not because more workers are hired. In India employment grew far more slowly than GDP in the late 1990s.
In more detail
Jobless growth is a concern in a country with a growing labour force, because it leaves many people without work or in low-paid informal jobs. Policy responses include promoting labour-intensive manufacturing and services, small enterprises and skill development, and public works programmes in rural areas.
Example
If GDP grows 6 per cent and employment grows 1 per cent, each 1 per cent of growth creates only 0.17 per cent more jobs.
Key points
- Gap between GDP and employment growth.
- Linked to capital-intensive and technology-led growth.
- Employment elasticity measures it.
Common mistake
Assuming that high GDP growth always creates jobs.
Related terms
Where it is explained
This term is explained in Class 11 Indian Economic Development Chapter 7: Employment.