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Labor regulation and employment in India's retail stores

Listed author(s):
  • Amin, Mohammad

A new dataset of 1948 retail stores in India shows that 27% of the stores find labor regulations as a problem for their business. Using these data, we analyze the effect of labor regulations on employment at the store level. We find that flexible labor regulations have a strong positive effect on job creation. Our estimates show that labor reforms are likely to increase employment by 22% of the current level for an average store. We also address the issue of informality in India's retail sector. Our findings suggest that more flexible labor laws can encourage firms to operate in the more efficient formal retail sector. According to our estimates, labor reforms could reduce the level of informality by as much as 33%. Journal of Comparative Economics 37 (1) (2009) 47-61.

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Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 1 (March)
Pages: 47-61

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:1:p:47-61
Contact details of provider: Web page: http://www.elsevier.com/locate/inca/622864

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  1. Dal Bo, Ernesto & Rossi, Martin A., 2007. "Corruption and inefficiency: Theory and evidence from electric utilities," Journal of Public Economics, Elsevier, vol. 91(5-6), pages 939-962, June.
  2. Juan Botero & Simeon Djankov & Rafael LaPorta & Florencio López-de-Silanes & Andrei Shleifer, "undated". "The Regulation of Labor," Working Paper 19483, Harvard University OpenScholar.
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  8. Rashmi Banga, 2005. "Critical issues in India's services-led growth," Indian Council for Research on International Economic Relations, New Delhi Working Papers 171, Indian Council for Research on International Economic Relations, New Delhi, India.
  9. Simeon Djankov & Rafael Porta & Florencio de & Andrei Shleifer, 2002. "Courts: The Lex Mundi Project," Yale School of Management Working Papers ysm277, Yale School of Management, revised 01 Nov 2003.
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  13. Poonam Gupta & James P. F. Gordon, 2004. "Understanding India’s Services Revolution," IMF Working Papers 04/171, .
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