The shift lamp is a warning light attached to the vehicle to show the driver that the maximum RPM is almost reached. Ideally, the shift lights will light on the engine speed outside which gives the maximum BHP so that the BHP before and after the shift is the same. Speeding up the machine beyond this point is not conducive to rapid acceleration. In using a shift lamp allows the driver to assess the exact point that the tooth replacement should be done without having to glance at the tachometer. It also enhances security for the driver by keeping his focus on the track at all times.
Beginning in the early 1980s, many US market vehicles equipped with manual transmissions began to have shift lamps as standard equipment; this will usually signal an increase in engine speed that delivers maximum fuel efficiency, lower than the ideal engine speed for maximum BHP. The reason is, for the time being, fuel economy testing rules stipulate that shift lights will be followed on a fully-equipped vehicle, they are calibrated for optimal fuel mileage on the EPA test cycle. Some in the 1980s even had bells to warn the driver at a certain rpm.
Source of the article : Wikipedia