TY - JOUR
T1 - Trade reforms, labor regulations, and labor-demand elasticities
T2 - Empirical evidence from India
AU - Hasan, Rana
AU - Mitra, Devashish
AU - Ramaswamy, K. V.
PY - 2007/8
Y1 - 2007/8
N2 - Using industry-level data disaggregated by states, this paper finds a positive impact of trade liberalization on (the absolute values of) labor demand elasticities in the Indian manufacturing sector. The magnitudes of these elasticities turn out to be negatively related to protection levels that vary across industries and over time. Furthermore, we find that these elasticities are not only larger in size for Indian states with more flexible labor regulations, they are also impacted there to a larger degree by trade reforms. Finally, we find that the reforms have led to a reduction in the share of labor in total output and value added, possibly due to the reduction in the bargaining power of workers.
AB - Using industry-level data disaggregated by states, this paper finds a positive impact of trade liberalization on (the absolute values of) labor demand elasticities in the Indian manufacturing sector. The magnitudes of these elasticities turn out to be negatively related to protection levels that vary across industries and over time. Furthermore, we find that these elasticities are not only larger in size for Indian states with more flexible labor regulations, they are also impacted there to a larger degree by trade reforms. Finally, we find that the reforms have led to a reduction in the share of labor in total output and value added, possibly due to the reduction in the bargaining power of workers.
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U2 - 10.1162/rest.89.3.466
DO - 10.1162/rest.89.3.466
M3 - Article
AN - SCOPUS:34548601280
SN - 0034-6535
VL - 89
SP - 466
EP - 481
JO - Review of Economics and Statistics
JF - Review of Economics and Statistics
IS - 3
ER -