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Can Labour Regulation Hinder Economic Performance? Evidence from India

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Author Info
Besley, Timothy J.
Burgess, Robin

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Abstract

This Paper investigates whether the industrial relations climate in Indian states has affected the pattern of manufacturing growth in the period 1958-92. We show that pro-worker amendments to the Industrial Disputes Act are associated with lowered investment, employment, productivity and output in registered manufacturing. Regulating in a pro-worker direction is also associated with increases in urban poverty. This suggests that attempts to redress the balance of power between capital and labour can end up hurting the poor.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 3260.

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Date of creation: Mar 2002
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Handle: RePEc:cpr:ceprdp:3260

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Keywords: industrial relations; labour regulation;

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Find related papers by JEL classification:
H00 - Public Economics - - General - - - General
H10 - Public Economics - - Structure and Scope of Government - - - General
I30 - Health, Education, and Welfare - - Welfare and Poverty - - - General
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
K20 - Law and Economics - - Regulation and Business Law - - - General
L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
O20 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - General
O40 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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  7. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages C1-33, March. [Downloadable!] (restricted)
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  8. Bhalotra, Sonia R, 1998. "The Puzzle of Jobless Growth in Indian Manufacturing," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 60(1), pages 5-32, February.
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  12. Simeon Djankov & Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "The Regulation Of Entry," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 1-37, February. [Downloadable!] (restricted)
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  13. R. Hirschowitz, 1989. "The Other Path: The Invisible Revolution in the Third World," South African Journal of Economics, Economic Society of South Africa, vol. 57(4), pages 266-272, December. [Downloadable!] (restricted)
  14. Maddala, G S & Wu, Shaowen, 1999. " A Comparative Study of Unit Root Tests with Panel Data and a New Simple Test," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 61(0), pages 631-52, Special I. [Downloadable!] (restricted)
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