Abstract: Work and Efficiency in Cotton Mills: Did the Indian Entrepreneur Fail?

Bishnupriya Gupta

Abstract

What explains the low productivity of Indian cotton textile workers, compared to workers in other countries such as the United Kingdom and Japan? Clark and Walcott argue that it is the low effort level of the Indian worker, reflecting workers' relative preferences for low work intensity rather than income and union resistance to increased work norms. This paper suggests that two alternative explanations are more compelling. First, nutrition levels and living conditions were such that Indian workers may have been physically incapable of higher work intensities, in line with nutritional efficiency wage arguments. Second, effort and wages may have been inefficiently low, but managers failed to recognize the possibility of a Pareto improving rise in both. This may have been due to the separation of the managerial functions in Indian industry, where responsibility for work discipline rested with the jobbers, while the technical staff was mainly European. We also show that labor use per machine was not higher in the unionized Bombay mills as compared to other regions, suggesting that worker resistance to increased effort cannot be an explanation for low productivity.