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Unions, Wages and Labour Productivity : Evidence from Indian Cotton Mills

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  • Gupta, Bishnupriya

    (Department of Economics, University of Warwick)

Abstract

This paper uses firm level data from all the textile producing regions in India to examine the relation between wages, unionization and labour productivity. We find that fewer workers were employed per machine in the unionized mills in Bombay and Ahmedabad, as compared to non-unionized regions implying that low labour productivity was not due to union resistance to increased work intensity. Our findings suggest that while low wages in India encouraged overmanning, higher wages, prompted by unionization, had productivity enhancing effects. We explore alternative explanations for low labour productivity, arising from the managerial and institutional structure of Indian cotton mills.

Suggested Citation

  • Gupta, Bishnupriya, 2006. "Unions, Wages and Labour Productivity : Evidence from Indian Cotton Mills," The Warwick Economics Research Paper Series (TWERPS) 753, University of Warwick, Department of Economics.
  • Handle: RePEc:wrk:warwec:753
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    File URL: https://www2.warwick.ac.uk/fac/soc/economics/research/workingpapers/2006/twerp_753.pdf
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    References listed on IDEAS

    as
    1. Steven G. Allen, 1983. "Unionization and Productivity in Office Building and School Construction," NBER Working Papers 1139, National Bureau of Economic Research, Inc.
    2. Brown, Charles & Medoff, James, 1978. "Trade Unions in the Production Process," Journal of Political Economy, University of Chicago Press, vol. 86(3), pages 355-378, June.
    3. Edward C. Prescott & Stephen L. Parente, 1999. "Monopoly Rights: A Barrier to Riches," American Economic Review, American Economic Association, vol. 89(5), pages 1216-1233, December.
    4. Machin, Stephen J, 1991. "The Productivity Effects of Unionization and Firm Size in British Engineering Firms," Economica, London School of Economics and Political Science, vol. 58(232), pages 479-490, November.
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