Enterprise and employment: We need dynamic firms to generate jobs
₹30,000 a month, which is far higher than what new employees get on average in cities. The prospect of stable employment is an added incentive. Yet, such a scramble for government employment is also a symptom of the lack of quality jobs in an economy that has otherwise had a good run since the pandemic.
A few weeks earlier, nearly 2,000 young aspirants landed outside a hotel in the Gujarat town of Bharuch in the hope of getting one of the 10 jobs on offer. No wage premium was reported here. The jobs issue has gained political resonance, with state governments promising to increase the number of people they hire and the Central government now providing wage subsidies to companies that take on new employees.
A lot of economic research shows that insipid job creation in an economy has a lot to do with business dynamism—and the policies that either support or hinder it. The new World Development Report, an annual research publication from the World Bank, has as its focus the middle-income trap, or why most countries stumble after robust economic growth takes them to what the multilateral lender defines as upper middle-income status. Only a few, such as South Korea which has an average income of $30,000 for every citizen, have continued along their high-growth paths to become rich countries.
Leaping across the chasm will be a challenge for China right now and for India a decade later. In a background paper written for the World Development Report, Charles Gottlieb, Markus Poschke, and Michael Tueting provide informative data on the structure of employment by firm size across various country income groups. The structural transformation between lower-middle income countries and upper-middle income countries is especially
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