A key prediction of dynamic labor demand models is that firing restrictions attenuate firms’ employment responses to economic fluctuations. The authors provide the first direct test of this prediction using data from India. The authors exploit the fact that rainfall fluctuations, through their effects on agricultural productivity, generate variation in local demand within districts over time. Consistent with the theory, we find that industrial employment...
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INFORMATION
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2018/01/01
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Article de revue
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127014
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1
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1
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2018/06/11
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Disclosed
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Firing costs and flexibility : evidence from firms' employment responses to shocks in India
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labor regulation
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