ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Anamitra RoychowdhurySubscribe to Anamitra Roychowdhury

An Inquiry into the Theoretical Structure Underlying the Labour Market Flexibility Argument in India

The theory underlying the labour market flexibility argument in India is identified and critically examined. A review of the empirical studies reveals that this argument is based on rigid real wages, in turn, explained by hiring and firing costs. Such explanations are provided by the insider–outsider theory of employment and unemployment due to Lindbeck and Snower (1988). A scrutiny of the I–O theory reveals that it could not even explain the existence of involuntary unemployment under reasonable assumptions. Further, it is shown that its policy recommendation necessarily assumes Say’s law. Thus, it is concluded the theoretical foundation underlying the LMF is unsound.

Recent Changes in Labour Laws

This article explores the possible implication of amending the Contract Labour Act, 1970 and questions the rationale behind amending the Industrial Disputes Act, 1947.

The 'Demographic Dividend' and Young India's Economic Future

Declining fertility rates have changed the age structure of India's population, resulting in a "bulge" in the working age-group. This "demographic dividend" has improved the dependency ratio leading to the hypothesis that the bulge in working population will lead to an acceleration in growth. However, recent employment figures indicate that the absorption of the Indian youth into the labour force is not as high as one would expect. This is perhaps due to the poor employability of the workforce, which is severely affected by a deficit in educational attainment and health. This needs to be remedied in order to take advantage of the opportunity for growth that the demographic dividend is supposed to give India.
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