Factors influencing the decision to hire contract labour by Indian manufacturing firms |
| |
| Authors: | Jaivir Singh Deb Kusum Das Kumar Abhishek |
| |
| Affiliation: | 1. Centre for Study of Law and Governance,Jawaharlal Nehru University,New Delhi, India;2. Department of Economics,Ramjas College, University of Delhi,New Delhi, India;3. Centre for Economic Studies and Planning (CESP),Jawaharlal Nehru University,New Delhi,India |
| |
| Abstract: | ABSTRACTOver a third of workers employed in the Indian formal manufacturing sector are ‘contract’ workers – hired through the services of labour contractors, facing lower wages and no job security in relation to regular workers. We investigate the role of a variety of factors that influence the decision of employers to hire in contract workers, using information from a specially commissioned survey of manufacturing firms. While there are immediate cost advantages that tilt firms towards hiring in contract labour, a counterforce has employers favouring regular workers in firms that have a large proportion of their workforce concentrating on production activity – probably instances where long-term human capital investment by regular workers is important for the firm.Abbreviation: CLA: Contract Labour (Regulation and Abolition) Act, 1970 ASI: Annual Survey of Industries NIC: National Industrial Classification MSME: Micro, Small and Medium Enterprises SEZ: Special Economic Zone ICRIER: Indian Council for Research on International Economic Relations |
| |
| Keywords: | Employment contract worker manufacturing labour laws survey probit |
|
|
