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51. Labor Laws and Manufacturing Performance in India: How Priors Trump Evidence and Progress Gets Stalled

Author:
Servaas Storm
Publication Date:
02-2019
Content Type:
Working Paper
Institution:
Institute for New Economic Thinking (INET)
Abstract:
Strong labor protections for ordinary workers are often portrayed as a ‘luxury developing countries cannot afford’. No study has been more influential in propagating this perversity trope in the context of the Indian economy than the QJE article of Besley and Burgess (2004). Their article provides econometric evidence that pro-worker regulation resulted in lower output, employment, investment and productivity in India’s registered manufacturing sector. This paper reviews existing critiques of Besley and Burgess (2004), which highlight conceptual and measurement errors and uncover econometric weaknesses. The paper takes a step beyond these: it reports a failure to replicate Besley and Burgess’ findings and demonstrate the nonrobustness of their results. My deconstruction is not only about the econometrics, however. I show that Besley and Burgess’ findings are not just inconsistent with their theoretical priors, but also internally contradictory and empirically implausible, taxing any person’s capacity for belief. The paper, written by two ‘useful economists’, exhibits a gratuitous empiricism in which priors trump evidence. On all counts, it fails the test of being useful to the purpose of ‘evidence-based’ public policy advice.mp Evidence and Progress Gets Stalled
Topic:
Economics, Political Economy, Labor Issues, Inequality, and Labor Policies
Political Geography:
India and Asia

52. Demand-Driven Youth Training Programs: Experimental Evidence from Mongolia

Author:
José Galdo, Bayarmaa Dalkhjavd, Altantsetseg Batchuluun, Soyolmaa Batbekh, and Maria Laura Alzúa
Publication Date:
08-2019
Content Type:
Working Paper
Institution:
Center for Distributive, Labor and Social Studies (CEDLAS)
Abstract:
Because of its high incidence and potential threat to social cohesion, youth unemployment is a global concern. This study uses a randomized controlled trial to analyze the effectiveness of a demand-driven vocational training program for disadvantaged youth in Mongolia. Mongolia, a transitional country whose economic structure shifted from a communist, centrally planned economy to a free-market economy over a relatively short period, offers a new setting in which to test the effectiveness of standard active labor market policies. This study reports positive and statistically significant short-term effects of vocational training on monthly earnings, skills matching, and self-employment. Substantial heterogeneity emerges as relatively older, richer, and better-educated individuals drive these positive effects. A second intervention that randomly assigns participants to receive repetitive weekly newsletters with information on market returns to vocational training shows positive impacts on the length of exposure to and successful completion of the program. These positive effects, however, are only observed at the intensive margin and do not lead to higher employment or earnings outcomes.
Topic:
Development, Economics, Industrial Policy, Labor Issues, Employment, Youth, and Labor Policies
Political Geography:
Mongolia and Asia

53. The Only Answer is to Mobilise the Workers. An Interview with K. Hemalata, President of the Centre of Indian Trade Unions.

Author:
Tricontinental: Institute for Social Research
Publication Date:
07-2019
Content Type:
Working Paper
Institution:
Tricontinental: Institute for Social Research
Abstract:
In the face of increasing neoliberal policies, the working-class movement in India has seen several major general strikes. Our eighteenth dossier – an interview with K Hemalata, President of the Centre of India Trade Unions – discusses the challenges and struggles facing the Indian working class and how they are able to organise workers who initially were apprehensive and afraid to join working class movement.
Topic:
Labor Issues, Class, Unions, and Mobilization
Political Geography:
India and Asia

54. Organizing Old Age Pensions for India’s Informal Workers: A Case Study of a Sector-Driven Approach

Author:
M.R. Narayana
Publication Date:
04-2018
Content Type:
Working Paper
Institution:
Walter H. Shorenstein Asia-Pacific Research Center
Abstract:
About 88 percent of India’s total labor force is composed of informal (officially labeled “unorganized”) workers. As many as 388 million such workers lack old age income security by way of a pension system. The Atal Pension Yojana (APY) is the latest contributory, national-level old age pension scheme for unorganized workers, with an entry age of 18–40 years. In other words, all current unorganized workers above the age of 40 are excluded. How could a national pension system viably guarantee equal pension benefits to all current unorganized workers? This paper considers how such a system might work by offering a case study of a non-contributory pension scheme for building and other construction workers in Karnataka State, India. The results indicate that this state-level pension scheme, fully funded by sector-specific receipts, is financially viable and sustainable with high levels of coverage and adequacy. The robustness of these results is shown via sensitivity analyses of discount rates, inflation rates, and growth rates of specific purpose tax collections. Additional analyses outline the scenarios under which pension benefits could be extended to all informal workers in the sector studied.
Topic:
Labor Issues, Work Culture, Unions, and Pension
Political Geography:
India and Asia

55. The Rise of China and the Rebound in Korea’s Manufacturing Employment

Author:
Kyong Hyun Koo and Unjung Whang
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
Korea Institute for International Economic Policy (KIEP)
Abstract:
Over the last three decades, the world has experienced a substantial in-crease in Chinese import penetration due to the rapid improvement in Chi-na’s supply productivity, which is often called the “China shock” or “China syndrome.” The existing literature have shown that the increase in imports from China due to the China shock adversely affected the manufacturing employment of a number of advanced countries such as the U.S., Norway, Denmark, and Spain. Unlike those advanced countries, South Korea has shown a pronounced increase in exports to China as well as imports from China since the 1990s. Over the same time, furthermore, Korea’s manufactur-ing employment has shown a stagnated downward trend compared to other advanced economies and even rebounded since the mid-2000s. Given these motivations, this study investigates both import and export channels to ex-plore how the China trade shocks affected the exceptional trend in Korea’s manufacturing employment from 1993 through 2015. To capture the overall employment effects of the China shocks, specifically, we consider not only how a Korean manufacturing industry employment is affected by the change in its direct exposure to China trade shocks (direct effects), but also how other industries’ changes in exposure to China trade shocks affect the industry through domestic industrial linkages (indirect ef-fects), largely following the empirical approach employed by Acemoglu et al. (2016). Mainly using firm-level data for almost all Korean manufacturing firms with more than four employees and the 2SLS estimation method, we find that during the period 1993-2015 the increase in Chinese import expo-sure had statistically insignificant direct effects on Korea’s manufacturing em-ployment on average, while 1% point increase in Chinese export exposure directly caused 0.18% increase in employment across Korean manufacturing industries. For the indirect effects of China shocks, in contrast, 1% point in-crease in Chinese import exposures of downstream industries (intermediate goods buyers) led to 3.00% decrease in employment of upstream industries (intermediate goods sellers) on average, while 1% point increase in Chinese export exposures of downstream industries brought 1.70% increase in em-ployment of upstream industries on average. The relatively moderate direct effects compared to the indirect ones are partly explained by two factors: First, Korea has gone through a substantial change in the structure of its trade with China since 2000s, so that within-industry supply chains between China and Korea have become more intertwined for some industries. Second, the Korean industries whose main downstream industries were substantially exposed to the Chinese imports (exports) tended to have a relatively low di-rect Chinese import (export) exposure during the period 1993-2015. Based on the 2SLS estimates above, the increased Chinese import expo-sure turns out to have decreased Korea manufacturing employment by 1,210,000 during the period 1993-2015, mainly through the indirect channel. In contrast, the increased Chinese export exposure appears to have increased Korea manufacturing employment by 1,090,000 during the same period, through the direct channel (210,000) and indirect channel (880,000). In the case of Korea’s manufacturing industry, therefore, most of the job reduction attributable to the China shocks has been also offset by job creation caused by the China shocks. Such a considerable increase in manufacturing jobs due to the rise of China, which has not been reported yet in other advanced economies, appear to have played an important role in generating the re-bounding trend in Korea’s manufacturing employment.
Topic:
Globalization, Labor Issues, Economic Policy, and Trade Shocks
Political Geography:
China, Asia, and South Korea

56. Migration to Brick Kilns in India: An Appraisal

Author:
Shamindra Nath Roy and Eesha Kunduri
Publication Date:
07-2018
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
This note expounds on migration to brick-kilns in India, based on estimates from the National Sample Survey (NSS) 2007-08 employment- unemployment and migration survey, and a review of eld studies. Characterised by traditional modes of production, low capital- intensity, seasonal employment patterns and lack of adequate regulations, the brick industry is a signi cant site for interrogating variegated issues that lie at the intersection of migration, labour markets and urbanisation. The analysis herein sheds light on the spatial concentrations of brick- kiln workers, which are along urban peripheries and driven by migrants. The phenomenon of jodi labour, referring to family based labour (typically of husband and wife) that characterises brick- kiln work is explicated using NSS estimates. The analysis concludes that the modes and modalities of employment in brick-kilns combined with piece-rated wage payments raises complex issues that call for consideration. At the same time, an understanding of the spatial concentration of kilns could help with interventions with regard to expanding the outreach of the Construction Workers' Welfare Board (CWWB) and facilities for accompanying children of the migrant workers.
Topic:
Migration, Labor Issues, Urbanization, and Employment
Political Geography:
South Asia, India, and Asia

57. Migration Junctions in India and Indonesia Reimagining Places, Reorienting Policy

Author:
Mukta Naik and Gregory Randolph
Publication Date:
04-2018
Content Type:
Special Report
Institution:
Centre for Policy Research, India
Abstract:
This report, jointly put out by the Centre for Policy Research and JustJobs Network, draws attention to geographies in India and Indonesia that are acting as migration junctions because they simultaneously experience high levels of in- and out-migration. The quantitative analysis is based on an earlier paper that measured ‘migrant-intensity’ of districts in India and kota (cities) and kabupatens (regencies) in Indonesia using Census data. In both countries, small cities, peripheral districts and centres of natural resource extraction feature as migration junctions. This prompts new ways of thinking about pathways that migrants take in, out and through places. The report highlights that migration junctions have particular policy challenges and opportunities including increased need for coordination across governance institutions, the ability to concerate workforce development efforts for incoming and outgoing populations and the need to develop robust rental housing markets to serve mobile populations.
Topic:
Migration, Labor Issues, and Governance
Political Geography:
South Asia, Indonesia, India, Asia, and Southeast Asia

58. Endowment Structure, Industry Dynamics and Vertical Production Structure in China-Theory and Evidence

Author:
Jim H. Shen, Leilei Shen, and Jun Zhang
Publication Date:
12-2018
Content Type:
Working Paper
Institution:
School of Oriental and African Studies - University of London
Abstract:
This paper proposes a theoretical model and shows that the comparative advantage of China’s factor endowment allows firms specializing in the midstream stage to gain at least as much as firms that specialize in the two ends of the supply chain (capital-intensive stage and labour- intensive stage) in terms of labour productivity and profitability, if and only if they have at least as much viability and use intermediate level of capital intensity. The empirical results are consistent with the theory’s predictions. Our findings on China’s industry supply chain production patterns provide a new angle on the division of gains in the vertical production network driven by the endowment structure. This could have far-reaching implications for the industrial development of other middle-income countries.
Topic:
Industrial Policy, Labor Issues, Capital, and Production
Political Geography:
China and Asia

59. Redefining Inclusive Growth in Asia: How APEC can Achieve an Economy that Leaves no one Behind

Author:
Maria Dolores Bernabe
Publication Date:
11-2017
Content Type:
Policy Brief
Institution:
Oxfam Publishing
Abstract:
In November 2017, leaders will gather in Vietnam for the Asia-Pacific Economic Cooperation (APEC) summit. The last few decades have seen astonishing growth and poverty reduction across Asia, but inequality is on the rise and the benefits of growth are increasingly going to those at the top. This paper sets out how APEC leaders can use the opportunity of the summit to move in a new direction – one in which the economy works for everyone, not just the few.
Topic:
Regional Cooperation, Labor Issues, Health Care Policy, Private Sector, Economic Cooperation, and Inclusion
Political Geography:
Asia and Asia-Pacific

60. Exported as a Commodity: North Korean Workers Officially Dispatched Overseas

Author:
Greg Scarlatoiu
Publication Date:
04-2017
Content Type:
Journal Article
Journal:
International Journal of Korean Studies
Institution:
International Council on Korean Studies
Abstract:
North Korea officially dispatches over 60,000 workers to a minimum of 20 countries in Asia, Africa, Europe, and the Middle East. The regime confiscates much of the USD 200 million earned by these workers annually. Despite the known exploitation and hardship, North Koreans continue to covet these positions, which provide rare opportunities to spend time outside the world’s most isolated dictatorial regime and send small amounts of money to their families at home. Only those deemed loyal to the regime as measured by North Korea’s songbun system have access to these jobs. Even those with “good songbun” frequently bribe government officials to secure one of the few positions available. Once overseas, workers labor under harsh and dangerous conditions that border on slavery. North Korea’s pervasive security apparatus continues to survey all activities while spouses and children serve as de facto hostages to prevent defections. The Kim Family Regime’s dispatch of workers amounts to exporting its subjects as a commodity. Efforts to address this issue must be based on applicable international standards. Governments bound by international agreements should first seek redress, as difficult as it may be, before terminating the contracts that cover North Korea’s overseas workers.
Topic:
Human Rights, Labor Issues, Economy, and UN Security Council
Political Geography:
Africa, Europe, Middle East, Asia, and North Korea