Job Reallocation Dynamics in India: Evidence from Large Manufacturing Plants

Bhaskar Jyoti Neog and Bimal Kishore Sahoo

Oxford Bulletin of Economics and Statistics, 2020, vol. 82, issue 4, 934-959

Abstract: The paper contributes to the limited literature on job reallocation dynamics in Indian manufacturing. The study uses annual data from the Annual Survey of Industries (ASI) for the years 2000–01 to 2015–16. The study finds job reallocation in India to be quite high compared to flexible labour markets such as the United States and Canada. Gross job reallocation shows a rising trend over time, which is driven partially by the increasing share of contract workers in the workforce. There is heterogeneity in the job reallocation dynamics across job types. This is evident in the relative importance of the different job types as plants adjust to permanent and temporary changes in demand. Labour regulations also play an important role in such a process. Finally, in contrast to the evidence for the United States and the United Kingdom, our study found firm evidence to reject the hypothesis that job reallocation is countercyclical in India.

Date: 2020
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