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Factors influencing the decision to hire contract labour by Indian manufacturing firms

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Listed:
  • Jaivir Singh
  • Deb Kusum Das
  • Kumar Abhishek
  • Prateek Kukreja

Abstract

Over a third of workers employed in the Indian formal manufacturing sector are ‘contract’ workers – hired through the services of labour contractors, facing lower wages and no job security in relation to regular workers. We investigate the role of a variety of factors that influence the decision of employers to hire in contract workers, using information from a specially commissioned survey of manufacturing firms. While there are immediate cost advantages that tilt firms towards hiring in contract labour, a counterforce has employers favouring regular workers in firms that have a large proportion of their workforce concentrating on production activity – probably instances where long-term human capital investment by regular workers is important for the firm.Abbreviation: CLA: Contract Labour (Regulation and Abolition) Act, 1970 ASI: Annual Survey of Industries NIC: National Industrial Classification MSME: Micro, Small and Medium Enterprises SEZ: Special Economic Zone ICRIER: Indian Council for Research on International Economic Relations

Suggested Citation

  • Jaivir Singh & Deb Kusum Das & Kumar Abhishek & Prateek Kukreja, 2019. "Factors influencing the decision to hire contract labour by Indian manufacturing firms," Oxford Development Studies, Taylor & Francis Journals, vol. 47(4), pages 406-419, October.
    • Handle: RePEc:taf:oxdevs:v:47:y:2019:i:4:p:406-419
    DOI: 10.1080/13600818.2019.1624705
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    Cited by:

    1. Jaivir Singh & Deb Kusum Das & Kumar Abhishek, 2022. "Specific Human Capital and Skills in Indian Manufacturing: Observed Wage and Tenure Relationships from a Worker Survey," The Indian Journal of Labour Economics, Springer;The Indian Society of Labour Economics (ISLE), vol. 65(4), pages 1007-1028, December.
    2. Diti Goswami & Sourabh Bikas Paul, 2020. "Labor Reforms in Rajasthan: A boon or a bane?," Papers 2012.01016, arXiv.org.
    3. Jaivir Singh & Deb Kusum Das & Kumar Abhishek, 2020. "Specific Human Capital and Skills in Indian Manufacturing: Observed Wage and Tenure Relationships from a Worker Survey," Indian Council for Research on International Economic Relations (ICRIER) Working Paper 397, Indian Council for Research on International Economic Relations (ICRIER), New Delhi, India.
    4. Subir Bikas Mitra & Piyali Ghosh, 2022. "Engaging Contract Labour: Learnings from Landmark Judgements," Management and Labour Studies, XLRI Jamshedpur, School of Business Management & Human Resources, vol. 47(1), pages 97-118, February.

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