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Unions, Wages and Labour Productivity: Evidence from Indian Cotton Mills

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  • Gupta, Bishnupriya

Abstract

This paper uses firm level data from all the textile producing regions in India to examine the relation between wages, unionization and labour productivity. We find that fewer workers were employed per machine in the unionized mills in Bombay and Ahmedabad, as compared to non-unionized regions implying that low labour productivity was not due to union resistance to increased work intensity. Our findings suggest that while low wages in India encouraged overmanning, higher wages, prompted by unionization, had productivity enhancing effects. We explore alternative explanations for low labour productivity, arising from the managerial and institutional structure of Indian cotton mills.

Suggested Citation

  • Gupta, Bishnupriya, 2006. "Unions, Wages and Labour Productivity: Evidence from Indian Cotton Mills," Economic Research Papers 269646, University of Warwick - Department of Economics.
    • Handle: RePEc:ags:uwarer:269646
    DOI: 10.22004/ag.econ.269646
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