Labour Laws, Informality, and Development: Comparing India and China

Simon Deakin, Shelley Marshall and Sanjay Pinto

Working Papers from Centre for Business Research, University of Cambridge

Abstract: This paper explores trends in the formalisation and informalisation of work, focusing on the world’s two largest labour markets, India and China. A first task in is to define what is meant by informal work. The definitions used by international agencies are not uniform and different countries have distinct approaches. There are numerous dimensions to informality that are not fully captured in statistical data. There is a trend towards formal employment and away from own-account work and self-employment in many regions of the world, particularly in East Asia where the proportion of the labour force in waged employment has doubled over the past three decades. The paper will look more closely at the contrasting cases of India (where formal work has increased recently, but to a very small extent) and China (where a variant of the standard employment contract may be emerging), discuss reasons for the divergence between them, and consider the relationship between formality and developmental outcomes in the two countries.

Keywords: Informality; labour laws; employment contract; India; China (search for similar items in EconPapers)
JEL-codes: J46 J68 K31 (search for similar items in EconPapers)
Date: 2020-03
New Economics Papers: this item is included in nep-cna, nep-iue and nep-law
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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp518

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