Discussion Paper Details

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Title: Can Labour Regulation Hinder Economic Performance? Evidence from India

Author(s): Timothy J. Besley and Robin Burgess

Publication Date: March 2002

Keyword(s): industrial relations and labour regulation

Programme Area(s): Public Economics

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.

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Bibliographic Reference

Besley, T and Burgess, R. 2002. 'Can Labour Regulation Hinder Economic Performance? Evidence from India'. London, Centre for Economic Policy Research.