Contract Workers and Firm Productivity in the Indian Manufacturing Sector

Paper explores the impact of employing contract workers

Abstract

Results indicate that on average, contemporaneous productivity effects of contract workers are positive reflecting their high motivation levels in an expectation to obtain permanent status. However, average lagged productivity effect is negative indicating that contract work arrangements that typically last only for a fixed term, potentially hinder the accumulation of firm specific human capital, consequently adversely affecting productivity.

This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programme

Citation

Soundararajan, V. Contract Work and Endogenous Firm Productivity in the Indian Manufacturing sector. (2015) 47 pp

Contract Workers and Firm Productivity in the Indian Manufacturing Sector

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