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The labour market flexibility debate in India: Re-examining the case for signing voluntary contracts

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  • Anamitra ROYCHOWDHURY

Abstract

A major focus of India's ongoing policy debate over labour market flexibilization has been the statutory requirement that firms employing 100 or more workers cannot dismiss employees without prior government permission. The case for repealing that requirement (or greatly increasing the workforce threshold) is notably underpinned by Basu, Fields and Debgupta (2009). Here, the author challenges their particular theoretical argument for hiring and firing at will based on the voluntary signing of contracts, demonstrating that their general policy conclusion is logically unsustainable even within the framework of that model. The case for labour market flexibilization through voluntary contracting thus remains unfounded.

Suggested Citation

  • Anamitra ROYCHOWDHURY, 2014. "The labour market flexibility debate in India: Re-examining the case for signing voluntary contracts," International Labour Review, International Labour Organization, vol. 153(3), pages 473-487, September.
    • Handle: RePEc:bla:intlab:v:153:y:2014:i:3:p:473-487
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    File URL: http://hdl.handle.net/10.1111/j.1564-913X.2014.00008.x
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    References listed on IDEAS

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    1. The World Bank,, 2010. "India's Employment Challenge: Creating Jobs, Helping Workers," OUP Catalogue, Oxford University Press, number 9780198063513.
    2. Solow, Robert M, 1985. " Insiders and Outsiders in Wage Determination," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 411-428.
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    Cited by:

    1. 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.
    2. Thibaud Deguilhem & Adrien Frontenaud, 2016. "Quality of Employment Regimes and Diversity of Emerging Countries [Régimes de qualité de l’emploi et diversité des pays émergents]," Post-Print halshs-02283486, HAL.
    3. 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.
    4. Diti Goswami & Sourabh Bikas Paul, 2020. "Labor Reforms in Rajasthan: A boon or a bane?," Papers 2012.01016, arXiv.org.
    5. Deguilhem, Thibaud & Frontenaud, Adrien, 2016. "Régimes de qualité de l’emploi et diversité des pays émergents," Revue de la Régulation - Capitalisme, institutions, pouvoirs, Association Recherche et Régulation, vol. 19.
    6. Irfan Ahmad SOFI & Mohd Hussain KUNROO, 2018. "Demand shocks and employment adjustments: Does employment protection legislation create rigidity?," International Labour Review, International Labour Organization, vol. 157(3), pages 461-480, September.

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