In 2014, Rajasthan deregulated its industrial labour laws. Labour law reforms impact various industrial and economic outcomes, one of which is female employment. In this context, our study examines the impact of the amendments to state-level industrial labour law on female employment in organized manufacturing in India.
We utilize a difference-in-difference (DID) methodology to analyze the impact of the changes in industrial labour laws on female employment in organized manufacturing. We obtain information on organized manufacturing in India from the annual survey of industries (ASI) from 2011–12 to 2016–17. The information provided by ASI helps us understand how the changes in industrial relations affect female employment.
The pro-employer reform in industrial laws has augmented female employment absorption, whereas the reforms have caused male employment to decline. This suggests a strong positive relationship between flexible industrial policies and improving labour market outcomes by promoting female employment.
We analyzed the impact of deregulations only on formal manufacturing plants and excluded unorganized manufacturing and other sectors. We fail to conclude the impact of the reforms on different aspects of development and welfare outcomes. Further, we did not address the long-term impact of the reforms.
The findings contribute to the policy discourse by offering empirical evidence on the state-level reforms in industrial labour laws that support economic growth and inclusivity.
Our results are particularly valuable for policymakers in countries grappling with low and declining female workforce participation. However, the deregulations of industrial labour laws should be complimented with comprehensive policies that ensure job quality, security, and inclusiveness.
The study provides a detailed perspective on Indian industrial relations and labour market policies, often absent in broader macroeconomic analysis. Further, we contribute by developing a comprehensive analysis of the differential impacts of amendments in industrial labour laws on gender, particularly in the context of a developing economy.
