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Labor Law, Judicial Efficiency, and Informal Employment in India

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  • Sonja Fagernäs

Abstract

This study assesses the effects of industrial disputes legislation and the dispute‐settlement process on informal versus formal employment in India. It uses indicators of pro‐worker court awards and court efficiency as well as amendments to the Industrial Disputes Act (IDA) at the level of Indian states. The state‐level IDA amendments are classified in relation to their pro‐worker stance and ability to enforce existing legislation. The main finding is that the relationship between formal employment in both the industrial and service sectors and the judicial indicators is weak. Results are not robust to model specification. Thus, the evidence is neither robust nor strong enough to confirm the much claimed negative relationship between pro‐worker judicial change and the degree of formal work in the entire service or industrial sectors.

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  • Sonja Fagernäs, 2010. "Labor Law, Judicial Efficiency, and Informal Employment in India," Journal of Empirical Legal Studies, John Wiley & Sons, vol. 7(2), pages 282-321, June.
    • Handle: RePEc:wly:empleg:v:7:y:2010:i:2:p:282-321
    DOI: 10.1111/j.1740-1461.2010.01179.x
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    1. Amrit Amirapu & Michael Gechter, 2020. "Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 34-48, March.

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