BPOS: TALENT HUBS
Can BPOs serve as a budding ground for future strategists? Evidence from India
In the last 30 years, globalisation has dramatically changed job opportunities in the developing world, and India is no exception. In fact, existing evidence on India suggests that cities and districts with a major IT presence have experienced changes in education patterns with the growth in ITES jobs. But the question is: Are they also producing future strategists?
Issue Date - 15/12/2011
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We therefore interpret our results as reflecting a reaction to changes in returns to schooling. We distinguish two possibilities. First, the introduction of an ITES center may impact actual returns to schooling in the local area by providing new jobs at that center; this can explain our results only if labour markets are very localised. Alternatively, it may impact perceived returns to schooling by providing better information about these jobs in general; this can explain our results only if information is very localised.
To distinguish between these possible mechanisms, we conducted a survey in one district in Tamil Nadu (Madurai), which allows us to observe (a) the localisation of the labour market and (b) how widely information diffuses. We find evidence in favour of the information story. Our data indicate that people do travel several kilometers for work, which suggests the narrow geographic range of ITES center impacts is not due to localisation of labour markets. In contrast, knowledge is very localised. Even limiting the sample to individuals who live within one kilometer of an ITES center we find that those who live closer are more likely to report they know of a center in the local area and to correctly identify what qualications are required for the job. Although less well identied, this provides suggestive evidence that the localised impacts we observe reflect slow information diffusion.
In terms of policy, the results here suggest that the very presence of job opportunities may be enough to prompt changes in local area schooling, while supporting the claim that policies which provide better information may be effective in promoting school enrollment in areas further from new job options. Although this paper focuses on the case of India, the results may well have implications for other countries. In the broadest sense, they suggest that poor understanding of job opportunities is a potentially important factor in limiting school enrollment in the developing world.
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