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Estimating workers’ bargaining power and firms’ markup in India: Implications of reforms and labour regulations

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  • Pal, Rupayan
  • Rathore, Udayan

Abstract

This paper simultaneously estimates workers’ bargaining power (WBP) and firm’s markup (FMU) in Indian manufacturing industries, using state-wise three-digit industry-level panel data for the period 1980–2007. It also examines the association of WBP and FMU with industrial deregulation, trade liberalisation and labour regulations. Results of the econometric analysis suggest that WBP is negatively associated with both industrial deregulations and trade liberalisation, but there is no significant association of FMU with these reforms. Further, pro-worker amendments to selected provisions of Industrial Disputes Act 1947, but not all, seem to enhance WBP to some extent. In light of these findings, policy implications are brought out.

Suggested Citation

  • Pal, Rupayan & Rathore, Udayan, 2016. "Estimating workers’ bargaining power and firms’ markup in India: Implications of reforms and labour regulations," Journal of Policy Modeling, Elsevier, vol. 38(6), pages 1118-1135.
  • Handle: RePEc:eee:jpolmo:v:38:y:2016:i:6:p:1118-1135
    DOI: 10.1016/j.jpolmod.2016.09.002
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    More about this item

    Keywords

    Workers’ bargaining power; Firms’ mark-up; Industrial deregulations; Trade liberalisation; Labour regulations;

    JEL classification:

    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology

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