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Does Casualization Increase the Job Opportunity to the Workers or Impoverish Them? An Evidence from Indian-Organized Manufacturing Sector

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  • Simontini Das

Abstract

This article investigates the impact of casualization on the labour market of organized manufacturing industries in India. In specific, this article analyses the impact of casualization on the labour demand and output elasticity of 15 manufacturing industries in the post-liberalization period for the direct production workers. Dynamic panel data analysis of system generalized methods of moment method is used here for the estimation of lagged labour demand for permanent production workers. Aggregate level analysis ensures that casualization has a significant positive impact on the labour demand and on output elasticity. Disaggregate level analysis also confirms the significant positive impact on the output elasticity at individual industry level. However, wage share of the workers falls along with the increase in the usage of contract workers across most of the industries. Output elasticity increases but at the cost of falling wage share. Casualization generates more job opportunity but reduces the wage share for the permanent production workers in post-liberalization period. JEL Codes: J20, J21, J30, J46, C23

Suggested Citation

  • Simontini Das, 2018. "Does Casualization Increase the Job Opportunity to the Workers or Impoverish Them? An Evidence from Indian-Organized Manufacturing Sector," South Asia Economic Journal, Institute of Policy Studies of Sri Lanka, vol. 19(1), pages 86-107, March.
    • Handle: RePEc:sae:soueco:v:19:y:2018:i:1:p:86-107
    DOI: 10.1177/1391561418761076
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    More about this item

    Keywords

    Labour demand; output elasticity; wage share; contract workers; dynamic panel data analysis;
    All these keywords.

    JEL classification:

    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models

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