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A Longitudinal Analysis of Contractualisation of Workers in Selected Indian Manufacturing Industries

Author

Listed:
  • Sharu Chhabra

    (GGDSD College, Sector 32)

  • Meenu Saihjpal

    (Panjab University)

Abstract

A transformation is underway in the employment patterns in manufacturing sector across the globe from the last few decades as there is an augmented preference to hire contract workers in order to be cost-efficient. In the present paper, an econometric analysis is conducted to discern the trends in growth, intensity and determinants which contribute to the contractualisation of workforce in three organised manufacturing industries, that is manufacturing of tobacco products, manufacture of refined petroleum products, and building of ships and boats industries in India from 1998 to 2018. Present research is based on secondary sources of data including Annual Survey of Industries (ASI), Ministry of Statistics and Programme Implementation (MoSPI), and World Bank. Ratios and percentages are used for the analysis of trend of growth and intensity. Results demonstrate fluctuations in the trend in the growth of absolute number of contract workers in all the three industries which could be due to various judicial interpretations and global economic slowdown of 2008. Rising trend of proportion of contract workers among total workers is observed in manufacturing of refined petroleum products and building of ships and boats industry, whereas fluctuations in the intensity of contract workers are observed in manufacturing of tobacco products industry. The most significant period of growth in contractual labour spans from 2002 to 2007. Further, determinants are analysed through the application of time series econometric model, namely, auto-regressive distributed lagged model. The current study underscores that pivotal contributors to the escalating trend of contractualisation in these industries include trade unionisation, export intensity, differential labour cost, capital-labour ratio, and average firm size.

Suggested Citation

  • Sharu Chhabra & Meenu Saihjpal, 2025. "A Longitudinal Analysis of Contractualisation of Workers in Selected Indian Manufacturing Industries," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 68(3), pages 1011-1035, September.
    • Handle: RePEc:spr:ijlaec:v:68:y:2025:i:3:d:10.1007_s41027-025-00572-2
    DOI: 10.1007/s41027-025-00572-2
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    Keywords

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    JEL classification:

    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L66 - Industrial Organization - - Industry Studies: Manufacturing - - - Food; Beverages; Cosmetics; Tobacco
    • F10 - International Economics - - Trade - - - General
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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