The International Monetary Fund (IMF) said yesterday that the declining share of manufacturing jobs need not hurt growth or raise inequality, provided that the right policies were in place.
The IMF in its latest World Economic Outlook research paper found that the goal of supporting equitable growth would be better served by policy efforts to raise productivity across all sectors and make the gains from higher productivity more inclusive.
The study showed that countries where inequality in labour earnings had risen since 1980 had typically experienced a decline in the share of manufacturing employment.
IMF economist Bertrand Gruss said manufacturing jobs were waning. “In many emerging markets and developing economies, workers are shifting from agriculture to services, bypassing the manufacturing sector,” Gruss said.
“In advanced economies, the rise in service sector employment typically reflects the outright disappearance of manufacturing jobs.” The IMF also said the increased transfer of knowledge and technology to emerging market economies had partly offset the effects of the recent slowdown in innovation at the technology frontier and helped drive income convergence for many emerging economies.
Roberto Piazza, an economist at IMF, said policymakers must make certain that the positive growth benefits from globalisation and technological innovation were shared widely across the population.
Source: BUSINESS REPORT