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Labour market flexibility in Indian manufacturing: A critical survey of the literature

Author

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  • Aditya BHATTACHARJEA
Abstract
A growing literature seeks to establish a relationship between India's supposedly “restrictive” labour laws and its poor performance on a range of industrial and social indicators. After providing an overview of this literature, this article shows that multiple errors were made in the foundational papers that constructed indices measuring interstate differences in labour regulation. These indices were then misinterpreted as measures of labour market flexibility. The literature is also marred by econometric problems and by difficulties involved in replicating the analysis with corrected and updated indices. The author concludes by summarizing evidence of deteriorating labour market outcomes for workers in Indian manufacturing.

Suggested Citation

  • Aditya BHATTACHARJEA, 2021. "Labour market flexibility in Indian manufacturing: A critical survey of the literature," International Labour Review, International Labour Organization, vol. 160(2), pages 197-217, June.
    • Handle: RePEc:bla:intlab:v:160:y:2021:i:2:p:197-217
    DOI: 10.1111/ilr.12194
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    References listed on IDEAS

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    15. Servaas Storm, 2019. "Labor Laws and Manufacturing Performance in India: How Priors Trump Evidence and Progress Gets Stalled," Working Papers Series 90, Institute for New Economic Thinking.
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    2. Pubali Chakraborty & Kanika Mahajan, 2023. "Firm Size and Female Employment," Working Papers 103, Ashoka University, Department of Economics.
    3. Aditya Bhattacharjea, 2022. "Industrial policy in India since independence," Indian Economic Review, Springer, vol. 57(2), pages 565-598, December.

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