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Import Competition, Formalization, and the Role of Contract Labor

Research output: Working paper

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Import Competition, Formalization, and the Role of Contract Labor. / Chakraborty, Pavel; Singh, Rahul; Soundararajan, Vidhya.
Lancaster: Lancaster University, Department of Economics, 2021. (Economics Working Papers Series).

Research output: Working paper

Harvard

Chakraborty, P, Singh, R & Soundararajan, V 2021 'Import Competition, Formalization, and the Role of Contract Labor' Economics Working Papers Series, Lancaster University, Department of Economics, Lancaster.

APA

Chakraborty, P., Singh, R., & Soundararajan, V. (2021). Import Competition, Formalization, and the Role of Contract Labor. (Economics Working Papers Series). Lancaster University, Department of Economics.

Vancouver

Chakraborty P, Singh R, Soundararajan V. Import Competition, Formalization, and the Role of Contract Labor. Lancaster: Lancaster University, Department of Economics. 2021 Jul 22. (Economics Working Papers Series).

Author

Chakraborty, Pavel ; Singh, Rahul ; Soundararajan, Vidhya. / Import Competition, Formalization, and the Role of Contract Labor. Lancaster : Lancaster University, Department of Economics, 2021. (Economics Working Papers Series).

Bibtex

@techreport{44e9ff5e9b354222b94dbf1b5baf418f,
title = "Import Competition, Formalization, and the Role of Contract Labor",
abstract = "Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide causal evidence that higher import competition increases the share of the formal enterprise employment. We find an increase in the level of formal enterprise employment, driven by the high productivity firms, and in contrast, a fall in the informal enterprise employment. This labor reallocation is enabled by contract workers, who do not carry stringent ring costs. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 4.1 percentage points between 2000 and 2005. We calculate the labor productivity gap between the formal and informal sector, adjusting for differences in prices and worker characteristics and find them to be salient in explaining the observed gap. Our preferred estimate of the productivity gap implies an increase in labor productivity by 3.19% in response to Chinese import competition.",
keywords = "Formal sector employment, Contract workers, Chinese import, Reallocation, Misallocation",
author = "Pavel Chakraborty and Rahul Singh and Vidhya Soundararajan",
year = "2021",
month = jul,
day = "22",
language = "English",
series = "Economics Working Papers Series",
publisher = "Lancaster University, Department of Economics",
type = "WorkingPaper",
institution = "Lancaster University, Department of Economics",

}

RIS

TY - UNPB

T1 - Import Competition, Formalization, and the Role of Contract Labor

AU - Chakraborty, Pavel

AU - Singh, Rahul

AU - Soundararajan, Vidhya

PY - 2021/7/22

Y1 - 2021/7/22

N2 - Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide causal evidence that higher import competition increases the share of the formal enterprise employment. We find an increase in the level of formal enterprise employment, driven by the high productivity firms, and in contrast, a fall in the informal enterprise employment. This labor reallocation is enabled by contract workers, who do not carry stringent ring costs. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 4.1 percentage points between 2000 and 2005. We calculate the labor productivity gap between the formal and informal sector, adjusting for differences in prices and worker characteristics and find them to be salient in explaining the observed gap. Our preferred estimate of the productivity gap implies an increase in labor productivity by 3.19% in response to Chinese import competition.

AB - Using the case of the Indian manufacturing sector and exploiting plausibly exogenous variation from Chinese imports, we provide causal evidence that higher import competition increases the share of the formal enterprise employment. We find an increase in the level of formal enterprise employment, driven by the high productivity firms, and in contrast, a fall in the informal enterprise employment. This labor reallocation is enabled by contract workers, who do not carry stringent ring costs. Our estimates imply that Chinese import competition led to an increase in the share of formal sector employment by 4.1 percentage points between 2000 and 2005. We calculate the labor productivity gap between the formal and informal sector, adjusting for differences in prices and worker characteristics and find them to be salient in explaining the observed gap. Our preferred estimate of the productivity gap implies an increase in labor productivity by 3.19% in response to Chinese import competition.

KW - Formal sector employment

KW - Contract workers

KW - Chinese import

KW - Reallocation

KW - Misallocation

M3 - Working paper

T3 - Economics Working Papers Series

BT - Import Competition, Formalization, and the Role of Contract Labor

PB - Lancaster University, Department of Economics

CY - Lancaster

ER -