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Can Labour Regulation Hinder Economic Performance? Evidence from India

Timothy Besley () and Robin Burgess ()

No 3260, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: 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.

Keywords: industrial relations; labour regulation (search for similar items in EconPapers)
JEL-codes: H00 H10 I30 J50 K20 L50 L60 O20 O40 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dev
Date: 2002-03
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Journal Article: Can Labor Regulation Hinder Economic Performance? Evidence from India (2004) Downloads
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Working Paper: Can labour regulation hinder economic performance? Evidence from India (2002) Downloads
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