Impact of Globalisation on Labour in India

1) Reductions in product market and labour market regulations

2) Increased responsiveness of wage setting to supply/demand

pressures
3) Other things being equal, the government should act to reduce
structural unemployment.
4) The labour share of GDP has fallen, but real wages have grown

5) labour productivity is rising faster than real wages.

6) Real wage growth over the past decade is not correlated with
trade openness.
7) Despite real wage growth, earnings inequality has risen
8) Wages of more skilled workers have risen relative to those of less
skilled workers, though not in all countries.
9) Rising trade will coincide with rising skill related premia

10) Domestic labour demand is more sensitive to domestic

wages
11) Employment adjusts more rapidly to changes in desired
labour demand (via output, real labour costs, technical change
etc.)
12) Firms have an exit option which, if not exercised, reduces
the relative bargaining power of employers.
13) Impact of wage bargains will depend on the preferences of
those involved & the level at which bargaining takes place.
14) Globalisation is one factor contributing to the decline in the
labour income share and the rising returns for skilled workers
15) Technological change and changes in labour market
institutions are more important
16) globalisation raises the wage elasticity of labour demand

1
17) Globalisation also has positive effects on productivity levels
and growth in OECD economies
18) Greater specialisation in areas of comparative advantage
19) Better access to foreign knowledge
20) Benefits of enhanced competitive pressure in product
markets
21) Globalisation is associated with rising living standards. The
benefits are not shared automatically by all workers
22) Labour market developments are becoming more closely
linked with those in other countries
23) One channel for global factors to influence domestic cost
growth
24) China & India have significant reserves of underemployed
labour
25) Movements in the unemployment (and output) gap have
smaller effects on inflation than before. This can reflect many
factors –globalisation, other structural labour market changes,
better anchored inflation expectations and changes in monetary
policy frameworks
26) Globalisation has resulted in and has increased the risk of
Structural Unemployment.