Labour and Development

Home/ Labour and Development
Course TypeCourse CodeNo. Of Credits
Foundation ElectiveSLS2EC2234

Semester and Year Offered: 3/4 Semester/ 2nd Year

Course Coordinator and Team: Sona Mitra, Dipa Sinha

Email of course coordinator: dipa[at]aud[dot]ac[dot]in

Pre-requisites: Economics at the Undergraduate level

Aim: The course on Labour and Development primarily focuses on the theoretical constructs that explain contribution of labour in the process of economic development. Students would get exposed to the contesting perspectives on labour evolving from Classical, Keynesian, Neo-classical theories and political economy framework. It includes the foundations of the theory of wage determination, theories related to labour market segmentation and would critically review the demand-supply framework of labour market, human capital theories and focus on the macroeconomics of the labour markets. The course would introduce the concepts of gendered segregation of labour markets, care work of women, changing structures of labour markets in the context of technological advancement and increased global mobility and migration. It would also explore the contemporary debates relating to labour regimes; labour flexibility, rights and labour laws; emerging patterns of informality and changing structures of labour market institutions. The course would also introduce the concepts of labour statistics and focus on the various datasets related to employment/unemployment in the context of India.

Course Outcomes:

At the end of the course, students will be able to:

  1. Summarise issues related to the economics of labour and development.
  2. Explain the contribution of labour in the process of economic development, from different perspectives.
  3. Discuss the foundations of wage theory
  4. Review theories on labour segmentation, skill formation and employment.
  5. Discuss the institutional aspects of labour markets in India and related debates on labour regimes, emerging patterns of informality and structural changes in employment.

Brief description of modules/ Main modules:

1. Conceptualising Labour

  • Labour as unique factor; ‘passive’ factor reducible to abstract values; voluntary and involuntary unemployment; Lucas critique; choice theoretic perspective and its critique; labour and labour power, ‘reserve army of labour’

2. Macro Perspectives on Labour

  • Philips Curve, Natural Rate of Unemployment and NAIRU; critique of NAIRU and disequilibrium analyses.

3. Micro foundations of wage Determination

  • Determination of wage: Downward inflexibility of wages: Implicit contract theory; Efficiency Wage Theory; Fair Wage-Effort Hypothesis; Insider-outsider theory; Contested Exchange, Human Capital Theory, Skill Premium and Human Capital: Acceleration Hypothesis

4. Labour Market Segmentation

  • Demand-Supply Model; Fordist and Post-Fordist structures, Saturated and Unsaturated skills in knowledge industry; Internal Labour market, External discrimination.

5. Women, Work and Labour Markets

  • Gendered labour markets, understanding women’s employment and women’s work, unpaid work including unpaid care work, sexual division of labour.

6. Contemporary Debates on Labour Market

  • Accumulation and regulation regimes; labour market flexibility debate; non-wage employment and informality; labour market segmentation; structural change in growth and employment
  • The Indian Labour Market: Exploring current debates and introducing datasets
  • Contemporary debates on Labour and Development in India; labour regulations in India; structural change in growth and employment; rural non-agricultural employment; factor shares in Indian manufacturing industry.

Assessment Details with weights:

Presentation (20%), Term Paper (40%), End Semester Exam (40%)

In the term paper and presentation, the emphasis would be on developing the ability to formulate a small research question within a given broad topic, developing an attitude of independent thinking and learning how to assimilate material from multiple sources to present a coherent argument. The topics will be related to contemporary labour and employment challenges.

The end-semester examination would examine the students for their understanding of methods and approaches taught and their application to the range of labour and development issues

Reading List:

1. Conceptualising Labour

  • Labour Market Theory: A Constructive Reassessment, Ben Fine, Routledge, London and New York, 2003.
  • The Labour Market Under Capitalism, Prabhat Patnaik, The Indian Journal of Labour Economics, Vol. 49, No. 1, 2006

2. Macro Perspectives on Labour

  • Spencer, David (2006), Work for all those want it? Why the neo-classical supply curve is an inappropriate foundation for the theory of employment and unemployment, Cambridge Journal of Economics, 30, 459-472.
  • Lerner, A. P. (1936) “Mr Keynes’ “General Theory of Employment, Interest and Money ” International Labour Review, Vol. 34, No. 4 (Oct.), pp. 435–454.
  • Marglin, S. (1974), ‘What do Bosses do? The Origins and Function of Hierarchy in Capitalist Production, Review of Radical Political Economics, Vol.6, No.2, pp. 60-112.
  • Shapiro, Carl and Joseph E. Stiglitz (1984), ‘Equilibrium Unemployment as a Worker Discipline Device’, American Economic Review, Vol.74, No.3, pp.433-444.
  • Acemoglu, Daron (2002), ‘Technical Change, Inequality and the Labour Market’, Journal of Economic Literature, Vol. 40. No.1, pp. 7-72

3. Micro foundations of wage Determination

  • Hicks, John 1962. Theory of wages, Palgrave Macmillan (Reprint), UK
  • Becker, S. Gary (1962), ‘Investment in Human Capital: A Theoretical Analysis’, Journal of Political Economy, Vol. 70, No. 5, Part 2: Investment in Human Beings (Oct., 1962), pp. 9-49.
  • Schultz, W. Theodore (1962), ‘Reflections on Man’, Journal of Political Economy, Vol. 70, No. 5, Part 2: Investment in Human Beings (Oct., 1962), pp.1-8.
  • Akerlof, G (1982) ‘Labour Contracts as Partial Gift Exchange’, Quarterly Journal of Economics, Vol, 97, No.4, pp. 543-594.
  • Bowles, Samuel and Herbert Gintis (1990) ‘Contested Exchange: New Micro Foundations for the Political Economy of Capitalism’, Politics and Society, Vol.8, No.2, pp. 165-222.
  • Bowles, Samuel (1985), ‘The Production Process in a Competitive Economy: Walrasian, Neo-Hobbesian and Marxian Models’, The American Economic Review, Vol. 75, No. 1, pp. 16-36.

4. Labour Market Segmentation

  • Doeringer, M. Piore; 1971. Internal labour markets and manpower analysis. DC Heath, New York
  • Reich, Michael; Gordon, David M. and Edwards, Richard C., "Dual Labor Markets: A Theory of Labor Market Segmentation" (1973). The American Economic Review, 63 (2) pp. 359-365
  • Labour Market Theory: A Constructive Reassessment, Ben Fine, Routledge, London and New York, 2003.
  • Cain, Glen G. “The Challenge of Segmented Labor Market Theories to Orthodox Theory: A Survey.” Journal of Economic Literature, vol. 14, no. 4, 1976, pp. 1215–1257. JSTOR, JSTOR,
  • Leontaridi, M. (1998), Segmented Labour Markets: Theory and Evidence. Journal of Economic Surveys, 12: 103–109.

5. Women, Work and Labour Markets

  • Ben Fine (1992), Women's Employment and the Capitalist Family: Towards a Political Economy of Gender and Labour markets, Routledge
  • Goldin, Claudia Dale. Understanding the Gender Gap: An Economic History of American Women. New York: Oxford University Press, 1990, ISBN 978-0-19-505077-6.
  • Humphries, Jane, and Jill Rubery. “The Reconstitution of the Supply Side of the Labour Market: the Relative Autonomy of Social Reproduction.” Cambridge Journal of Economics, vol. 8, no. 4, 1984, pp. 331–346. JSTOR, JSTOR,
  • Beneria, Lourdes and Gita Sen (1981) “Accumulation, Reproduction and Women's Role in Economic Development": Boserup Revisited”, Signs, Vol. 7, No. 2, Development and the Sexual Division of Labor (Winter, 1981), pp.279-298
  • Standing, Guy (March 1999). "Global feminization through flexible labor: a theme revisited". World Development. Elsevier. 27 (3): 583–602. doi:10.1016/S0305-750X(98)00151-X

6. Contemporary Debates on Labour Market

  • Besley, T. and Burgess, R. (2004) “Can Labour Regulation Hinder Economic Performance? Evidence from India”, The Quarterly Journal of Economics, Vol. 119, No. 1, pp. 91-134.
  • Brenner, Robert and Mark Glick (1991), ‘The Regulation Approach: Theory and History’, New Left Review’, 1/188 pp. 45-119.
  • Moser, C (1978), ‘Informal Sector or Petty Commodity Production: Dualism or Dependence on Urban Development’, World Development, Vol.6, No.9/10, pp. 1041-1064
  • Wood, Adrian (1998). Globalisation and labour market inequalities, The Economic Journal, 108(450), September. Pp.1463-1482.
  • Boyer, R. (1991) `The Eighties: The Search for Alternatives to Fordism', in B. Jessop, H. Kastendiek, K. Nielsen and O.K. Pedersen (eds) The Politics of Flexibility, pp. 106-132. Aldershot: Edward Elgar.
  • Labour markets in Asia: Issues and Perspectives (eds.) Jesus Felipe and Rana Hasan, Palgrave, 2006.

7. The Indian Labour Market: Exploring current debates and introducing datasets

  • Globalisation, Industrial Restructuring and Labour Standards: Where India Meets the Global, Debdas Banerjee, Sage, 2005.
  • Employment and Unemployment in India: Emerging Tendencies during Post-Reform Period, E. T. Mathew, 2006, Sage Publications, New Delhi.
  • Ghosh, Jayati (2009) Never Done and Poorly Paid: Women’s Work in Globalising India, New Delhi: Women Unlimited.
  • Bhattacharya, Aditya, (2006), ‘Labour market regulation and Industrial Performance in India: A Critical Review of the Empirical Evidence’, Delhi School of Economics Working Paper No. 141
  • Roy, Satyaki (2011), ‘High Non-wage Employment in India: Revisiting the Paradox in Capitalist Development’ in Indian Journal of Labour Economics, Vol. 54, No. 2, pp. 251-267, 2011.
  • Ghosh, Jayati (2016) Time poverty and the poverty of economics, METU Studies in Development, Vol 43, No 1 (2016)