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Indian Labour Law and its Impact on Unemployment, 1970-2006: A leximetric study

S. Deakin and Prabirjit Sarkar ()

Working Papers from Centre for Business Research, University of Cambridge

Abstract: We analyse a recently developed leximetric dataset on Indian labour law over the period 1970 to 2006. Indian labour law is seen to be highly protective of workers' interests by international standards, particularly in the area of dismissal regulation. We undertake a time-series econometric analysis to estimate the impact of the strengthening of labour laws on unemployment and industrial output in the formal economy. We find no evidence that pro-worker labour legislation leads to unemployment or industrial stagnation. Rather, pro-worker labour laws are associated with low unemployment, with the direction of causality running from unemployment and output to labour regulation.

Keywords: slabour law; unemployment; India (search for similar items in EconPapers)
JEL-codes: J08 J50 J60 J83 K31 (search for similar items in EconPapers)
Date: 2011-12
New Economics Papers: this item is included in nep-iue, nep-lab and nep-law
Note: PRO-2
References: Add references at CitEc
Citations: View citations in EconPapers (19)

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Persistent link: https://EconPapers.repec.org/RePEc:cbr:cbrwps:wp428

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