Formal sector subcontracting and informal sector employment in Indian manufacturing

Ana Moreno-Monroy, Janneke Pieters and Abdul Azeez Erumban

IZA Journal of Labor & Development, 2014, vol. 3, issue 1, 1-17

Abstract: Using nationally representative survey data of Indian manufacturing enterprises spanning the period 1995–2006, we analyze the link between formal sector subcontracting and informal sector employment. A novelty in our analysis is that this relationship is allowed to differ between modern and traditional segments of the informal sector. We show that formal sector subcontracting is positively related to employment growth only in the most modern segments of the informal sector. Increased subcontracting cannot explain the persistently high employment in traditional informal manufacturing activities in India. Instead, subcontracting can contribute to job creation in relatively modern segments of the informal sector. JEL codes: J21, O14, O17 Copyright Moreno-Monroy et al.; licensee Springer. 2014

Keywords: Informal sector; Subcontracting; Employment; Manufacturing; India (search for similar items in EconPapers)
JEL-codes: J21 O14 O17 (search for similar items in EconPapers)
Date: 2014
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Citations: View citations in EconPapers (25)

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DOI: 10.1186/s40175-014-0022-2

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