Publication: Import Competition, Formalization, and the Role of Contract Labor
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Embargoed until 2025-08-28
Embargoed until 2025-08-28
Date
2024-02-28
ISSN
0258-6770
Published
2024-02-28
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Abstract
Does higher import competition increase formalization and aggregate productivity Exploiting plausibly exogenous variation from Chinese imports, we provide empirical causal evidence that higher imports increase the share of formal manufacturing enterprise employment in India. This formal share increase is due to both the rise in formal-enterprise employment driven by high-productivity firms, and a fall in informal-enterprise employment. The labor reallocation is enabled by the formal firms’ hiring of contract workers, who do not carry stringent firing costs. Overall, Chinese import competition increased formal-sector employment share by 3.7 percentage points, and aggregate labor productivity by 2.87 percent, between the years 2000-2001 and 2005-2006.
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“Chakraborty, Pavel; Singh, Rahul; Soundararajan, Vidhya. 2024. Import Competition, Formalization, and the Role of Contract Labor. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/42355 License: CC BY-NC-ND 3.0 IGO.”
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World Bank Economic Review
1564-698X
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- Cited 2 times in Scopus (view citations)