Labor Regulation and Employment in India's Retail Stores

Author: Mohammad Amin
Source: World Bank Policy Research Working Paper 4314, August 2007

A new dataset of 1,948 retail stores in India compiled by the World Bank's Enterprise Surveys shows that 27 percent of the stores report labor regulations as a problem for their business. Using these data we analyze the effect of labor regulation on employment at the store level. The authors find that stricter labor regulation has a strong negative effect on employment. The authors estimates show that labor reforms are likely to increase employment by 22 percent of the current level for an average store.

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