Our takeaway from these statistics is that the growth in manufacturing productivity, as measured by sales per worker, has slowed considerably in the past decade, particularly in the several years leading up to the start of the COVID-19 pandemic in 2020. [...] The figure reveals a general downward trend in productivity growth since the 1990s, decelerating in the mid-2010s and the years leading up to the COVID-19 pandemic. [...] It also found significant gains for the firm to invest in such a program; 20 months after the end of the training program, the net rate of returns to the firm climbed to over 250 percent. [...] The results of this study point to competing incentives of middle management, particularly around the costs of supervisory turnover, as one of the causes of the misallocation of training. [...] The researchers conducted a second experiment to address this misalignment: employees received a bonus of a month's salary if they demonstrated the productivity benefits of the new technology in the presence of their employers.
- Pages
- 39
- Published in
- India
Table of Contents
- Workers Managers and Productivity How Investments in Workers can Fuel Indias Productivity Growth 1
- 1. Introduction 2
- 2. Some Stylized Facts on Manufacturing Productivity in India 3
- 2.1. Fact 1 Productivity Growth in Indian Manufacturing is Slowing 3
- 2.2. Fact 2 Indian Manufacturing Productivity is Several Times Lower Than That of the United States 4
- 2.3. Fact 3 Productivity Differs by High-skill and Low-skill Industries 5
- 2.4. Fact 4 There is a Large Dispersion in Manufacturing Productivity across Indian States and Industries 6
- 2.5. Fact 5 Productivity is Strongly Correlated with firms Investments in Their Workers 8
- 3. Causal Evidence on the Impacts of Investments in Workers 10
- 3.1. Category 1 Soft Skills 10
- 3.2. Category 2 Voice 12
- 3.3. Category 3 Environmental Conditions 14
- Hindustan Times 15
- 3.4. Category 4 Managerial Quality 16
- 4. Why Dont Firms Invest More in Workers 18
- 4.1. Information Frictions 18
- 4.2. Risk Aversion 19
- 4.3. Limited Attention 19
- 4.4. Misalignment of Incentives 20
- 4.5. Turnover Erodes the Value of Investing in Workers 21
- General skills 21
- References 21
- Comments and Discussion 26
- Rana Hasan 26
- Asian Development Bank 26
- Kanika Mahajan 26
- Ashoka University 26
- Motivation Importance of Human Capital Investment in Explaining Cross-Country Labor Productivity Differences 28
- The Role Played by Firm Size 29
- Identification Strategy 29
- Synthesis of Findings from the Interventions on What Increases Labor Productivity 30
- References 30
- Maitreesh Ghatak 31
- London School of Economics 31
- 1. Introduction 31
- 2. Placing the Argument in the Context of Indias Overall Economic Trajectory 32
- 3. Factors Influencing Firms Investment in Workers 34
- 4. Conclusions 35
- References 36
- General Discussion 36
