Size-Dependent Labour Regulations and Threshold Effects: The Case of Contract-worker Intensity in Indian Manufacturing

Labour regulations like employment protection legislation in India are size-dependent rules and therefore constitute a basis for threshold effects. Firms could use non-permanent workers to stay below the legal establishment size threshold of 100 workers. This strategy is expected to cause the ratio of non-permanent to total workers to peak at size close to the legal threshold size. [IGIDR WP-2013-012]. URL:[http://www.igidr.ac.in/pdf/publication/WP-2013-012.pdf].