One particularly significant piece of labour legislation in India is the Contract Labour (Regulation and Abolition) Act, 1970 (CLA,1970), which regulates labour hired by firms through the offices of a labour contractor - such labour being referred to as 'contract' labour in India. This paper...

This paper studies the effect of mandated severance pay in a matching model featuring wage rigidity for ongoing, but not new, matches. Mandated severance pay matters only if binding real wage rigidities imply inefficient separation under employment at will. In such a case, large enough severance...

We develop a model of relational contracts with moral hazard and asymmetric persistent information about an employee's type. We find that the form of the optimal contract depends on the job characteristics as well as the distribution of employees' talent. Bonus contracts are more likely to be...

The paper begins with a discussion of Indian labour law and the increasing use of "contract labour" in Indian formal manufacturing. We question the widespread perception that employment of contract labour provides flexibility to employers in terms of adjustment in response to demand and...

The present study attempts to investigate the factors affecting a firm's decision to hire contract workers. We use information from a specially commissioned survey of manufacturing firms undertaken in 2014 by ICRIER, as part of a World Bank funded project 'Jobs and Development: Creating...

The employment structure of India's organised manufacturing sector has undergone substantial changes over the last decade with a steep rise in the use of contract workers in place of directly hired workers. Much of the existing literature has attributed the widespread use of contract labour to...

Using the Colombian Annual Manufacturing Survey (AMS) between 2000 and 2014, this paper investigates the effect of labor contract modalities on firm productivity within the industrial sector through a structural model. We find that temporary workers contribute to firms’ labor productivity to a...