Firing Costs and Flexibility : Evidence from Firms' Employment Responses to Shocks in India

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dc.creatorAdhvaryu, Achyuta
dc.creatorChari, A. V.
dc.creatorSharma, Siddharth
dc.date2014-01-23T20:02:19Z
dc.date2014-01-23T20:02:19Z
dc.date2013-07
dc.date.accessioned2026-07-01T00:55:40Z
dc.descriptionA key prediction of dynamic labor demand models is that firing restrictions attenuate firms' employment responses to economic fluctuations. We provide the first direct test of this prediction using data from India. We exploit the fact that rainfall fluctuations, through their effects on agricultural productivity, generate variation in local demand within districts over time. Consistent with the theory, we find that industrial employment is more sensitive to shocks where labor regulation is less restrictive. Our results are robust to controlling for endogenous firm placement and vary across factory size in a pattern consistent with institutional features of Indian labor law.
dc.formatapplication/pdf
dc.identifierReview of Economics and Statistics
dc.identifier1530-9142
dc.identifierhttps://hdl.handle.net/10986/16605
dc.identifierhttps://doi.org/10.1596/16605
dc.identifier.urihttp://hdl.handle.net/123456789/413071
dc.languageen_US
dc.publisherMIT Press
dc.relationhttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.rightsCC BY-NC-ND 3.0 IGO
dc.rightshttp://creativecommons.org/licenses/by-nc-nd/3.0/igo
dc.rightsWorld Bank
dc.subjectlabor regulation
dc.subjectlabor policy
dc.titleFiring Costs and Flexibility : Evidence from Firms' Employment Responses to Shocks in India
dc.typeJournal Article
dc.typeArticle de journal
dc.typeArtículo de revista

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