Question
Consider the following statements regarding employment elasticity:
Select the correct answer using the code given below:
- It measures the percentage change in economic growth with respect to a 1% increase in employment
- The agriculture sector has more employment elasticity as compared to other sectors of the economy
Select the correct answer using the code given below:
Answer: Option C
Answer: (c)
Employment Elasticity (of growth) is a measure of percentage change in employment associated with 1 percentage change in economic growth.
Employment elasticity = % change in employment/ % change in economic growth
Employment elasticity of 0.01 implies that with every 1 percentage point growth in GDP, employment increases by just .01 per cent. Employment elasticity is falling consistently from 0.4 in the 1990s to 0.2 in 2014 and then 0.1 now.
The agriculture sector is highly labour-intensive employing around 47% of the labour force to produce 16% of GDP. So, the employment elasticity of the agriculture sector is more.
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Answer: (c)
Employment Elasticity (of growth) is a measure of percentage change in employment associated with 1 percentage change in economic growth.
Employment elasticity = % change in employment/ % change in economic growth
Employment elasticity of 0.01 implies that with every 1 percentage point growth in GDP, employment increases by just .01 per cent. Employment elasticity is falling consistently from 0.4 in the 1990s to 0.2 in 2014 and then 0.1 now.
The agriculture sector is highly labour-intensive employing around 47% of the labour force to produce 16% of GDP. So, the employment elasticity of the agriculture sector is more.
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