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Can labour regulation hinder economic performance? Evidence from India

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This paper investigates whether the industrial relations climate in Indian States has affected the pattern of manufacturing growth in the period 1958-92. We show that pro-worker amendments to the Industrial Disputes Act are associated with lowered investment, employment, productivity and output in registered manufacturing. Regulating in a pro-worker direction is also associated with increases in urban poverty. This suggests that attempts to redress the balance of power between capital and labour can end up hurting the poor.

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en

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application/pdf

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http://eprints.lse.ac.uk/3779/1/Can_Labour_Regulation_Hinder_Economic_Performance_Evidence_from_India.pdf

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