Technology Intensity and Global Competitiveness: Issues in Labour Cost and Employment

Productive employment generation is an important objective in most of the developing countries this motivation has probably induced firms to adopt capital intensive techniques. Based on the country specific data on the manufacturing sector in select developing countries the argument of high cost of labour reducing labour absorption has been examined critically. The effect of labour market regulations on employment has also been assessed. Evidence does not favour labour market deregulation; rather skill factor reveals a negative impact on employment, implying a mismatch between the available labour quality and the labour demand in these countries tends to reduce employment.