Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India

  title={Trade Reforms, Labor Regulations, and Labor-Demand Elasticities: Empirical Evidence from India},
  author={Rana Hasan and Devashish Mitra and Krishnarajapet V. Ramaswamy},
  journal={The Review of Economics and Statistics},
Using industry-level data disaggregated by states, this paper finds a positive impact of trade liberalization on (the absolute values of) labor demand elasticities in the Indian manufacturing sector. The magnitudes of these elasticities turn out to be negatively related to protection levels that vary across industries and over time. Furthermore, we find that these elasticities are not only larger in size for Indian states with more flexible labor regulations, they are also impacted there to a… 
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