ABSTRACT

The existing empirical studies concerning labour market rigidity associated with the labour laws in India suggest an adverse impact of rigidity on total factor productivity (TFP). In this paper, we improve upon both the measurement of spatiotemporal variation in labour market flexibility and plant-level TFP from production function estimates in the presence of institutional rigidity in labour inputs adjustment due to job security legislation based on the recent advancement in the literature. We use an unbalanced panel of manufacturing plants from the Annual Survey of Industries panel data from 1999–2000 to 2016–17 to analyse the relationship between labour market rigidity/flexibility and TFP. We find that establishments that fall under the purview of job security legislation have higher productivity than those outside the ambit of job security legislation. The results suggest that rigidity associated with job security provisions does not harm TFP, and higher flexibility is negatively associated with TFP. However, we find considerable heterogeneity in the flexibility–TFP relationship across various industry groups. The heterogeneity in the flexibility–TFP relationship suggests that flexibility-inducing labour policy may improve TFP in some industries and, at the same time, decrease it in others.

摘要

现有的与印度劳动法相关的劳动力市场刚性的实证研究表明，刚性对全要素生产率（TFP）产生不利影响。在本文中，我们基于最近的文献进展，在就业保障立法导致劳动力投入调整制度僵化的情况下，根据生产函数估计改进了劳动力市场灵活性的时空变化测量和工厂级全要素生产率的测量。我们使用 1999-2000 年至 2016-17 年工业年度调查面板数据中的不平衡制造工厂面板来分析劳动力市场刚性/灵活性与 TFP 之间的关系。我们发现，属于就业保障立法范围内的企业比那些不在就业保障立法范围内的企业具有更高的生产率。结果表明，与工作保障条款相关的刚性不会损害全要素生产率，而更高的灵活性与全要素生产率呈负相关。然而，我们发现不同行业群体的灵活性与 TFP 关系存在相当大的异质性。灵活性与全要素生产率关系的异质性表明，灵活性引发的劳动力政策可能会提高某些行业的全要素生产率，同时降低其他行业的全要素生产率。我们发现不同行业群体的灵活性与 TFP 关系存在相当大的异质性。灵活性与全要素生产率关系的异质性表明，灵活性引发的劳动力政策可能会提高某些行业的全要素生产率，同时降低其他行业的全要素生产率。我们发现不同行业群体的灵活性与 TFP 关系存在相当大的异质性。灵活性与全要素生产率关系的异质性表明，灵活性引发的劳动力政策可能会提高某些行业的全要素生产率，同时降低其他行业的全要素生产率。