Abstract
Building on insights from the insider-outsider theory, we examine the effects of the Employment Protection Legislation (EPL) on labour market outcomes, using high-court verdicts on labour disputes invoking Chapter 5-A and 5-B of the Industrial Disputes Act. Our regression analysis of a statewise unit-level dataset suggests that pro-worker judicial verdicts lead to an increase in wages and labour productivity especially in labour intensive industries, but discourage employment. The study demonstrates how the insider-outsider model combined with the labour market segmentation theory, unlike labour adjustment models, explain such findings consistently. The results suggest that loosening the EPL regime will have implications on the balance between the quantity and the quality of jobs, with serious consequences on industrial performance.
Original language | English |
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Pages (from-to) | 101-122 |
Number of pages | 22 |
Journal | Asian Journal of Law and Economics |
Volume | 13 |
Issue number | 1 |
Early online date | 28 Mar 2022 |
DOIs | |
Publication status | Published - 1 Apr 2022 |
Externally published | Yes |
Keywords
- employment protection legislation
- judicial outcomes
- labour disputes
- labour market segmentation
- wages
ASJC Scopus subject areas
- Law
- Economics, Econometrics and Finance (miscellaneous)