Publication: Are All Labor Regulations Equal? Assessing the Effects of Job Security, Labor Dispute, and Contract Labor Laws in India
Date
2007-06
ISSN
Published
2007-06
Author(s)
Ahsan, Ahmad
Pagés, Carmen
Abstract
This paper studies the economic effects
of legal amendments on different types of labor laws. It
examines the effects of amendments to labor dispute laws and
amendments to job security legislation. It also identifies
the effects of legal amendments related to the most
contentious regulation of all-Chapter Vb of the Industrial
Disputes Act-which stipulates that firms with 100 or more
employees cannot retrench workers without government
authorization. The analysis finds that laws that increase
job security or increase the cost of labor disputes
substantially reduce registered sector employment and output
but do not increase the labor share. Labor-intensive
industries, such as textiles, are the hardest hit by laws
that increase job security while capital-intensive
industries are most affected by higher labor dispute
resolution costs. The paper concludes that widespread and
increasing use of contract labor may have brought some
output and employment gains but did not make up for the
adverse effects of job security and dispute resolution laws.
Citation
“Ahsan, Ahmad; Pagés, Carmen. 2007. Are All Labor Regulations Equal? Assessing the Effects of Job Security, Labor Dispute, and Contract Labor Laws in India. Policy Research Working Paper; No. 4259. © World Bank, Washington, DC. http://openknowledge.worldbank.org/entities/publication/018234f6-e1e7-5d2f-b39c-e4863b5046db License: CC BY 3.0 IGO.”
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