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Labour Laws, Informality, and Development: Comparing India and China

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  • Simon Deakin
  • Shelley Marshall
  • Sanjay Pinto

Abstract

This paper explores trends in the formalisation and informalisation of work, focusing on the world’s two largest labour markets, India and China. A first task in is to define what is meant by informal work. The definitions used by international agencies are not uniform and different countries have distinct approaches. There are numerous dimensions to informality that are not fully captured in statistical data. There is a trend towards formal employment and away from own-account work and self-employment in many regions of the world, particularly in East Asia where the proportion of the labour force in waged employment has doubled over the past three decades. The paper will look more closely at the contrasting cases of India (where formal work has increased recently, but to a very small extent) and China (where a variant of the standard employment contract may be emerging), discuss reasons for the divergence between them, and consider the relationship between formality and developmental outcomes in the two countries.

Suggested Citation

  • Simon Deakin & Shelley Marshall & Sanjay Pinto, 2020. "Labour Laws, Informality, and Development: Comparing India and China," Working Papers wp518, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp518
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    File URL: https://www.jbs.cam.ac.uk/cbrwp518/
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    References listed on IDEAS

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    1. repec:ilo:ilowps:375000 is not listed on IDEAS
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    More about this item

    Keywords

    Informality; labour laws; employment contract; India; China;
    All these keywords.

    JEL classification:

    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J68 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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