Informalization of the formal sector
Evidence from India's manufacturing industries
Bibliographic Data
| ID | 2990634 |
|---|---|
| Authors | Radhicka Kapoor (0000-0002-7015-5935, India Habitat Centre), P P Krishnapriya (0000-0002-8441-941X, Amazon Web Services , USA), Priya Shyamsundar (corresponding author) |
| Year | 2023 |
| Volume | 14 |
| Issue | 1 |
| Publication date | 2023-01-01 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | IZA Journal of Development and Migration (JOURNAL) |
| Journal identifiers | ISSN: 2520-1786 • E-ISSN: 2520-1786 |
| Publisher | Walter de Gruyter GmbH (PUBLISHER • DE) |
| DOI | 10.2478/izajodm-2023-0005 |
| OpenAlex | W4389494499 |
| Language | EN |
| Citations received | 1 |
| References cited | 18 |
The employment structure of India's formal manufacturing sector has undergone substantial changes since the early 2000s with a steep rise in the use of contract workers in place of directly hired workers. Much of the existing literature has attributed the widespread use of contract labour to India's rigid employment protection legislation. The resulting informalisation of the workforce in the organised sector raises concerns about the sustainability of employment growth. Using a 14-year plant-level panel data from the Annual Survey of Industries, we find that in addition to labour market rigidities and the existence of a wage differential between contract and directly hired workers, plants in the organised manufacturing sector have another important incentive to hire contract workers. Plants appear to be using contract workers to their strategic advantage against the directly hired workers to keep their bargaining power and wage demand in check. Importantly, the strength of this bargaining channel varies across plants depending on their capital intensity of production, size and existing contract worker intensity
Bargaining power · Business · Contract farming · Differential (mechanical device · Economic growth · Economics · Incentive · Informal sector · Labour economics · Manufacturing · Manufacturing sector · Market economy · Production (economics · Wage · Workforce · Employment and Welfare Studies · Indian Economic and Social Development · Labor Movements and Unions · Marketing
Can Labor Regulation Hinder Economic Performance? Evidence from India
Testing Identifiability and Specification in Instrumental Variable Models
The Fissured Workplace
Contract employment as a worker discipline device
Job security regulations and the dynamic demand for industrial labor in India and Zimbabwe
Labor regulations and contract labor use
Wage Determination under Trade Unions
Bad Jobs in America
| Unique citing works | 1 |
|---|---|
| Citations per year | 1 |
| Citation span | 2025 - 2025 (1) |
| Citation velocity | recent |
| Highly cited | No |
| Citation types | Neutral: 1 |