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Size-dependent labor regulations and structural transformation in India

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  • Cai, Wenbiao
  • Pandey, Manish

Abstract

We calibrate a two-sector span-of-control model and show that size-dependent labor regulations generate the observed employment distribution across manufacturing establishments in India. We find that such regulations in manufacturing reduce productivity in agriculture and impede the process of structural transformation.

Suggested Citation

  • Cai, Wenbiao & Pandey, Manish, 2013. "Size-dependent labor regulations and structural transformation in India," Economics Letters, Elsevier, vol. 119(3), pages 272-275.
  • Handle: RePEc:eee:ecolet:v:119:y:2013:i:3:p:272-275
    DOI: 10.1016/j.econlet.2013.02.032
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    9. Marcel P. Timmer & Gaaitzen J. de Vries, 2009. "Structural change and growth accelerations in Asia and Latin America: a new sectoral data set," Cliometrica, Journal of Historical Economics and Econometric History, Association Française de Cliométrie (AFC), vol. 3(2), pages 165-190, June.
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    Cited by:

    1. Ravi Kanbur, 2017. "Informality: Causes, consequences and policy responses," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 939-961, November.
    2. Cai, Wenbiao, 2015. "Structural change accounting with labor market distortions," Journal of Economic Dynamics and Control, Elsevier, vol. 57(C), pages 54-64.
    3. Wenbiao Cai, 2019. "Technology, Policy Distortions, And The Rise Of Large Farms," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 60(1), pages 387-411, February.

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    More about this item

    Keywords

    Size-dependent policy; Structural transformation; India;
    All these keywords.

    JEL classification:

    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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