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China IndiaDEC Pranab Bardhan
China IndiaDEC Pranab Bardhan
By
Pranab Bardhan
University of California at Berkeley
Rural Urban
China
1995 0.33 0.52
India
1991 0.62 0.68
Pattern of Industrialization
infrastructure
Restrictive Labor Laws in India (particularly
those relating to job security) are often
considered a major disincentive to hiring in
large-scale labor-intensive industries and a
cause of more capital-intensive techniques
in production. In China strikes are not
permitted, and the monopoly Party union
has no say in lay-offs by employers. China
laid off about 30 million workers from state
and collective-owned urban manufacturing
enterprises in just five years—1995-2000; if
India tried even a fraction of this there would
have been a huge political upheaval.
But I think the constraint of restrictive labor
laws is somewhat exaggerated. Labor laws
are implemented at the state level and it is
well-known that many state Governments
look the other way when they are openly
violated -—Jenkins (2000) has referred to
this as an example of ‘reform by stealth’.
Since January 2008 a new labor law in China
partially secures the tenure of longtime
workers, but not so rigidly as in India.
By
Pranab Bardhan
University of California at Berkeley
II
The Nature of Capitalism