Examining the Nexus Between Social Security Benefits and Manufacturing Productivity in India

Due to large backward and forward linkages, the manufacturing sector holds a key place in any economy of the world. The importance of this sector increases even more when the economy is at a developing stage, moving away from agriculture dominance towards industrial and services sectors. This article attempts to examine the impact of social security benefits on manufacturing productivity in India while controlling for wages and trade openness. Study has been carried out while using the autoregressive distributed lag (ARDL) bounds testing approach on annual time series data for the period 1982–2019. The results revealed that social security benefits, trade openness and wage rate have a significantly positive impact on manufacturing productivity in the short run as well as the long run, while manufacturing output uncertainty has a negative but insignificant impact. These findings highlight the significance of both economic and social policies in fostering sustainable productivity growth in India’s manufacturing sector. JEL Classification: D1, I3