IDEAS home Printed from https://ideas.repec.org/a/oup/wbecrv/v38y2024i4p741-771..html
   My bibliography  Save this article

Import Competition, Formalization, and the Role of Contract Labor

Author

Listed:
  • Pavel Chakraborty
  • Rahul Singh
  • Vidhya Soundararajan

Abstract

Does higher import competition increase formalization and aggregate productivity? Exploiting plausibly exogenous variation from Chinese imports, we provide empirical causal evidence that higher imports increases the share of formal manufacturing enterprise employment in India. This formal share increase is due to both the rise in formal-enterprise employment driven by high-productivity firms, and a fall in informal-enterprise employment. The labor reallocation is enabled by the formal firms’ hiring of contract workers, who do not carry stringent firing costs. Overall, Chinese import competition increased formal-sector employment share by 3.7 percentage points, and aggregate labor productivity by 2.87 percent, between the years 2000–2001 and 2005–2006.

Suggested Citation

  • Pavel Chakraborty & Rahul Singh & Vidhya Soundararajan, 2024. "Import Competition, Formalization, and the Role of Contract Labor," The World Bank Economic Review, World Bank, vol. 38(4), pages 741-771.
    • Handle: RePEc:oup:wbecrv:v:38:y:2024:i:4:p:741-771.
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1093/wber/lhae007
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:oup:wbecrv:v:38:y:2024:i:4:p:741-771.. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    We have no bibliographic references for this item. You can help adding them by using this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Oxford University Press (email available below). General contact details of provider: https://edirc.repec.org/data/wrldbus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.