Contractualisation and productivity growth in formal sector: theory and evidence from Indian manufacturing

Maiti, Dibyendu S. (2013) Contractualisation and productivity growth in formal sector: theory and evidence from Indian manufacturing. UNSPECIFIED.

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Abstract

The paper investigates whether the provision of contract labour use in India has been conducive for productivity improvement in the formal industrial sector. The law allowed Indian firms to hire workers through contractors (i.e., contract workers), limited to use on peripheral activities.
Theoretical speaking, such provision, though increases production and contractual employment, does not necessarily improve productivity growth. The use of such workers to bypass union workers leads to a reduction in competitive pressure from R&D efforts and thereby reduces productivity
growth. A modified approach of productivity estimation, by controlling market distortions and simultaneity problems, using three-digit industrial data over major fifteen Indian states for the period 1998-2005, suggests that the increase in contractual employment share has an ambiguous impact on total productivity factor growth.

Item Type:	Other
Subjects:	H Social Sciences > HD Industries. Land use. Labor
Divisions:	Faculty of Business and Economics (FBE) > School of Economics
Depositing User:	Ms Shalni Sanjana
Date Deposited:	18 Jun 2014 23:55
Last Modified:	21 Jun 2016 23:27
URI:	https://repository.usp.ac.fj/id/eprint/7517

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