Can Labor Regulation Hinder Economic Performance? Evidence from India
|Speaker:||Tim Besley, London School of Economics|
|Date:||Friday 1 November 2002|
|Location:||Room 106 Streatam Court|
(with Robin Burgess)
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 ammendments 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 labor can end up hurting the poor.