Work

Formal sector subcontracting and informal sector employment in Indian manufacturing

Year: 2014

Type: article

Abstract: Using nationally representative survey data of Indian manufacturing enterprises spanning the period 1995–2006, we analyze the link between formal sector subcontracting and informal sector employment. A novelty in our analysis is that this relationship is allowed to differ between modern and traditional segments of the informal sector. We show that formal sector subcontracting is positively related to employment growth only in the most modern segments of the informal sector. Increased subcontracting cannot explain the persistently high employment in traditional informal manufacturing activities in India. Instead, subcontracting can contribute to job creation in relatively modern segments of the informal sector. JEL codes:J21, O14, O17

Source: IZA Journal of Labor & Development

DOI: 10.1186/s40175-014-0022-2

Authors: Ana I Moreno-Monroy, Janneke Pieters, Abdul A Erumban

Institutions: Fundação Getulio Vargas, IZA - Institute of Labor Economics, Wageningen University & Research, University of Groningen, Conference Board

Language: English

Topic: Indian Economic and Social Development

Subfield: Economics and Econometrics

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDGs: Decent work and economic growth, Industry, innovation and infrastructure

Open Access status: hybrid

Funders: Rijksuniversiteit Groningen, International Institute of Social Studies, Erasmus University Rotterdam