Labor Regulations,Employment and Wages: Evidence from India's Apparel Sector |
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| Authors: | Rana Hasan Nidhi Kapoor Aashish Mehta Asha Sundaram |
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| Affiliation: | 1. Asian Development Bank;2. University of California, Santa Barbara;3. University of Auckland |
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| Abstract: | While India is among the world's largest producers and exporters of apparel products, the sector has not performed to its potential. This study analyzes why this might be so from the perspective of the structure of production in the sector, the most striking aspect of which is a firm size distribution heavily dominated by small firms. Using nationally representative firm‐level and labor force survey data, we argue that the dominance of firms operating at scales too small to apply modern production and management technologies is one proximate reason for India's relative underperformance. Further, we note that India's labor regulations and the associated enforcement regime are important policy drivers of Indian firms' tendency to avoid placing “too many workers under one roof”. |
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| Keywords: | Apparel industry firm size distribution formal and informal sectors inclusive growth India labor regulation J3 J46 J48 L11 L67 O14 O17 |
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