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Educational Development and Qualificational Upgradation In Indian Job Market: Analysis of Emerging Trend*
Amit Sharma and H. Chaturvedi


This study attempts to analyse the i) changing incidence of unemployment over a period of time and its interface with education, gender and rural/urban origins of workforce; it) changes in un-employment and employment rates of the educated; iii) process of up/down gradation of educational qualifications in the historical perspective. The process of up/ down gradation of qualifications has, in fact, been the major source of manpower substitution processes. But the down/ up gradation of educational qualifications is directly related to a) technological up-gradation of production base; and b) educational and economic development. Hypotheses have been formulated with a view to test their empirical validity. iv) to the extent to which the incidence of unemployment among the graduates has increased while unemployment among the matriculates has stagnated or declined, it lends indirect evidence to support the thesis that demandfor higher education has come to be substituted the demand for jobs after matriculation; and v) to the extent to which the proportions of a) matriculates, and b) graduates have increased among the employed, while the proportion of below matriculates has declined, it may be inferred that the more educated are preferred to the less educated in the job market.


I. Theoretical Paradegms

Classical Economists recognised only labour and capital as the factors of production, and hence, these were considered to be the drivers of growth of output. Marshall (1891) introduced human element through the recognition of organisation and enterprise as two additional but distinct factors of production and growth. However, the professional economic thinking, especially among the neo classical growth economists, continued to overlook the contribution of human factor to growth and development’. The growth accounting, however, left a substantial residual between the growth of output on the one hand, and the sum of growth of labour and capital on the other. This led to the plethora of research in growth accounting. Some economists attributed the remainder of growth equation to the Residual Factor, the part of growth which they could not account for properly. Several economists associated the Residual with Technology, while others explained it by Productivity based on Technology (See, For example, Abramovitz, 1956. Contributions of such economists as Dennison (1962) pioneered the recognition of human capital, that is, investment in man in general and investment in education in particular as a major contributor to growth and development. This brought a revolutionary shift in economic thinking with regard to the role and functions of human capital in growth and development. This attracted the attention of Indian economists also (See, For example, Kothari, 1971, Prakash, 1971a,1971b,1976, Panchmukhi, 1969).


Education-Employment-Economy Interface

Education is linked to economy via employment of manpower. Manpower needs emanate from education-employment-economy interface. This interface may be dated to the medivieal period though the foundation of its modern facets may be traced to the introduction of western education in India. The western education was introduced in India by Lord Macaulay’ not only for ensuring support of the educated Indian elites for British Empire but also to fulfill the manpower needs of administration in British India.
In every phase of economic growth and development of education in India ever since then, the twin roles of education as the core source of human capital accumulation and an instrument of accessing high.