Open AccessEmployment Aspects of Industrial Growth: A Correction
Author(s) -
M.D. Munna Ahmed
Publication year - 1975
Publication title -
pakistan development review
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.154
H-Index - 26
ISSN - 0030-9729
DOI - 10.30541/v14i1pp.142-145
Subject(s) - industrialisation , wage , developing country , census , economics , stock (firearms) , capital (architecture) , demographic economics , econometrics , labour economics , economic growth , geography , sociology , demography , population , archaeology , market economy
In the Summer 1974 edition of the Pakistan Development Review,Mr. Ishrat Hussain wrote an article on an aspect of Pakistan'sindustrialization that has aroused considerable interest and concern inother developing countries— the impact of technology and wage ratechanges on the growth of industrial employment [2,3 & 6]. Whilecommending Mr. Hussain's efforts in having drawn attention to thisaspect of our industrial strategy, it appears necessary to point outthat his analysis contains an important error in the basic data. Thisnote therefore is intended to correct the error in the data, rework theentire analysis, and suggest reasons why the conclusions drawn by Mr.Hussain are not warranted by the evidence he presents. The principalerror committed by Mr. Hussain was his failure to add the relevantvariables for Karachi to the West Pakistan data in the Census of1959-60.1 For example, Table III of his article shows West Pakistan'sfixed capital stock for All Industry as Rs. 918 million.1 This is, ofcourse, incorrect. West Pakistan's capital stock in 1959-60 was Rs. 952million+Rs. 490 million (Karachi)=Rs. 1,442 million; and a similarcorrection factor applies to all other variables derived from the Censusof that year. As it turns out, these corrections result in sufficientlylarge differences in the estimates of the Labour Displacement Effect andthe regression equation of changes in labour produc¬tivity on changes inwage rates and net output. A re-examination of his empirical resultstherefore seems warranted.