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Several developing economies have been generating fast growth, but formal employment generation remains a concern, causing a significant workforce to continue working in the informal sector. In this context, this study investigates the employment effects of international trade and in‐house R&D in the Indian case. Our attempt is important because India is not only the largest country in terms of population but also the largest working population in the world. We coalesce industry‐level data from two different sources for the period 1991–2018 and employ a powerful system GMM estimator in the analysis. Our findings are interesting and vital. We show that although the role of trade is overall positive, export and import have contrasting roles individually in generating employment. Most generally, exporting is a generator of employment, while importing causes a loss in it. Our analysis implies that the interplay of trade, and individually that of exports and imports, with in‐house R&D depends on many factors and may be more intricate than previously assumed. [ABSTRACT FROM AUTHOR]

This paper examines the recent surge in employment figures in India, which is quite unexpected due to several economic disruptions, including COVID-19. This has raised numerous questions regarding the quality and conditions of these newly generated jobs. The findings clearly indicate a rise in the share of unpaid family workers, especially among women in rural areas, while the proportion of regular employment has declined in recent years. Additionally, there is a predominance of informal employment and workers in the informal sector, which is also on the rise. These trends indicate a rise in distress-driven employment and a partial recovery of the labour market post COVID-19. Addressing these challenges requires urgent policy interventions. [ABSTRACT FROM AUTHOR]

Drawing on results from a panel of 2778 workers interviewed during and after the 68-day hard lockdown imposed in India, the following study examines the livelihood impact of the pandemic and the extent of subsequent recovery or lack thereof. Focussing specifically on workers located in the informal economy, the study is a useful addition to the burgeoning body of work on the economic impacts of Covid-19 by providing an insight into the employment and earnings recovery of those located at the margins. These findings are spliced across socio-economic groups to showcase the differential impact of the pandemic on different demographics within the informal sector. Our results show that six months after the hard lockdown, one out five persons were still out of work. Conditioned on being employed prior to the lockdown and having lost work during the lockdown, we find that urban respondents, women, workers above 60 and graduates were significantly less likely to recover from the shock. A similar exercise carried out for women workers showed that middle aged women, never married women and women who were not-literate or educated up until primary and middle school were significantly more likely to recover from job loss. Older women, those located in urban areas and Muslim women were on the other hand significantly less likely to recover from the job loss. Earnings on the whole were half of what they used to be prior to the pandemic. Some better off workers shifted to more precarious types of employment. Given the fall in earnings, poorer worker households were forced to borrow and the amount of loan taken was multiple times their average monthly income. In the context of loss in employment and reverse migration, the survey results show a substantial unmet demand for work under the MGNREGA programme even after the lockdown was lifted. We conclude that despite a partial recovery in the subsequent period, the pandemic-induced lockdown has undermined the material conditions for subsistence for a large segment within the informal economy. Moreover, any attempts made to re-imagine what a social protection programme for the informal economy should look like must take into account the segments most susceptible to an economic shock on their livelihoods. [ABSTRACT FROM AUTHOR]

A large proportion of the older population in India constitutes an undeniable share of workforce after the retirement age. This stresses the need to understand the implications of working at older ages on health outcomes. The main objective of this study is to examine the variations in health outcomes by formal/informal sector of employment of older workers using the first wave of the Longitudinal Ageing Study in India. Using binary logistic regression models, the results of this study affirm that type of work does play a significant role in determining health outcomes even after controlling socio-economic, demographic, life-style behaviour, childhood health and work characteristics. The risk of Poor Cognitive Functioning (PCF) is high among informal workers, while formal workers suffer greatly from Chronic Health Conditions (CHC) and Functional Limitations (FL). Moreover, the risk of PCF and/or FL among formal workers increases with the increase in risk of CHC. Therefore, the present research study underscores the relevance of policies focusing on providing health and healthcare benefits by respective economic activity and socio-economic position of older workers. [ABSTRACT FROM AUTHOR]

India presents a rich context for research on work and employment, epitomising the paradox of an 'emerging economy' but one where 92.4% of the workforce is informal – insecure, unprotected, poor – and women and disadvantaged groups most vulnerable. It displays a wide range of production relations in its formal/informal economy, embedded in diverse social relations, and the related forms of exploitation and resistance. This WES Themed Collection aims to review existing WES scholarship on India since 2001, identifying both gaps in scholarship and fruitful avenues for future research on India. The purpose is to showcase some of this scholarship while also advancing the internationalisation and expansion of the journal's presence in countries in the Global South. This effort is timely as decolonisation of scholarship and increased focus on the South is on the intellectual agenda, challenging established structures of power and knowledge in academia. [ABSTRACT FROM AUTHOR]

Aim. This empirical study aims to conceptualise the prevalence of Informal Vocational Training (IVT) in India. It also explores the missing link at accreditation level between IVTs and other formal vocational, technical and professional courses and depicts their implications in the occupational, economic, social and cultural lives of people. Methods. This study was conducted in the Srinagar city of the Union Territory of Jammu and Kashmir in India. Both the survey method and the case method were used for collecting the primary data and applying triangulation methodologically. Results. This study reveals that elites generally dominate in the prestigious technical and professional courses because of better accessibility and affordability, and that the vulnerable sections miss many of these opportunities. The vulnerable sections very often get the benefits of IVTs learnt outside the formal system in finding some employment, but such employment attracts lower prestige and income than what they get through formal technical and professional courses. IVTs find no academic recognition in the existing accreditation system, and so people culturally and socially associated with these IVTs continue to remain deprived. Conclusion. There is a need to develop a credit-based link between IVTs and formal vocational, technical and professional courses so that the skills learnt thro ugh IVTs could get transferred to the formal system and attract better occupational and economic rewards. The findings are relevant for both developing and developed societies, but more particularly for societies having a considerable presence of informal economy because IVTs exist more within these economies. [ABSTRACT FROM AUTHOR]

Historical experience suggests that a sustained rise in per capita incomes and improvement in employment conditions is not attainable without a structural transformation that moves surplus labour from agriculture and other informal economic activities to higher productivity activities in the non-farm economy. In this paper, I analyse India's performance from a cross-country comparative perspective, estimating the growth semi-elasticity of structural change. Using a cross-country panel regression, I estimate the effectiveness of growth in moving workers away from agricultural and informal activities as compared to other developing countries at similar levels of per capita income. I show that the performance in pulling workers out of agriculture is as expected given its level and growth of GDP per capita, but the same is not true for pulling workers out of the informal sector. I also propose the following five indicators that need to be kept track of when evaluating the growth process: the growth elasticity of employment, the growth semi-elasticity of structural change, the growth of labour productivity in the subsistence sector, the share of the organised sector in total employment and the workforce participation rate. Comparing these indicators across periods, states, regions or countries, allows us to understand which sets of policies have worked better than others to effective improvements in employment conditions. And taken together the indicators allow us to set structural change targets as well as to say whether the current pattern of growth is going to be sufficient to meet those targets. [ABSTRACT FROM AUTHOR]

Purpose: This research contributes to current debates on automation and the future of work, a much-hyped but under researched area, in emerging economies through a particular focus on India. It assesses the national strategy on artificial intelligence and explores the impact of automation on the Indian labour market, work and employment to inform policy. Design/methodology/approach: The article critically assesses the National Strategy on AI, promulgated by NITI Aayog (a national policy think tank), supported by the government of India and top industry associations, through a sectoral analysis. The key dimensions of the national strategy are examined against scholarship on the political economy of work in India to better understand the possible impact of automation on work. Findings: The study shows that technology is not free from the wider dynamics that surround the world of work. The adoption of new technologies is likely to occur in niches in the manufacturing and services sectors, while its impact on employment and the labour market more broadly, and in addressing societal inequalities will be limited. The national strategy, however, does not take into account the nature of capital accumulation and structural inequalities that stem from a large informal economy and surplus labour context with limited upskilling opportunities. This raises doubts about the effectiveness of the current policy. Research limitations/implications: The critical assessment of new technologies and work has two implications: first, it underscores the need for situated analyses of social and material relations of work in formulating and assessing strategies and policies; second, it highlights the necessity of qualitative workplace studies that examine the relationship between technology and the future of work. Practical implications: The article assesses an influential state policy in a key aspect of future of work–automation. Social implications: The policy assessed in this study would have significant social and economic outcomes for labour, work and employment in India. The study highlights the limitations of the state policy in addressing key labour market dimensions and work and employment relations in its formulation and implementation. Originality/value: This study is the first to examine the impact of automation on work and employment in India. It provides a critical intervention in current debates on future of work from the point of view of an important emerging economy defined by labour surplus and a large informal economy. [ABSTRACT FROM AUTHOR]

This paper evaluates the impact of migration on the labour market outcomes of non-migrant workers in India using unit-level data from the 'Employment Unemployment and Migration Survey' (NSSO 64th Round, 2007–2008). After correcting for endogeneity bias of migration using an instrument variable approach, the overall results of the study suggest that the inflow of migrant workers increases the wages of non-migrant workers but does not affect their employment. Disaggregating the analysis by sectors, the study finds a positive wage effect in the formal sector, which is more pronounced among the high-skilled workers. In the informal sector, the results indicate an adverse employment effect among both high- and low-skilled workers. The positive wage effect in the formal sector suggests complementarity between migrant and non-migrant workers. The adverse employment effect in the informal sector is possibly due to a preference for migrant workers over non-migrant workers. The estimated results are consistent with alternate specifications. [ABSTRACT FROM AUTHOR]

Purpose: This study aims to analyze the structure and trend in employment in the Indian economy between 1980-8081 and 2015-2016. Design/methodology/approach: Use of India KLEMS data set. Estimate growth rate of employment and discuss employment prospects using "Point" employment elasticity. Findings: Whilst India's GDP growth rate has been quite impressive since the reforms of 1991, the rate of employment growth, especially in the recent period of 2003-2015, has been quite slow (1 per cent) with low employment elasticity (0.1). The pattern of employment growth has also been imbalanced with slow rate of employment growth in manufacturing and rapid growth rate in the construction sector. India now also has low labour force participation rate and a large share of informal employment in the economy. Research limitations/implications: The limitation is the lack of reliable data on employment for the recent period. Practical implications: With overall low employment elasticity, India would have to explore sectors where more employment opportunities could be created. Social implications: India has to create not only more jobs but also "good" jobs. Originality/value: The India KLEMS data provide a time series for employment, which has been used in this paper to find "Point" elasticity instead of arc elasticity of employment and is an improvement over existing employment elasticity estimates. [ABSTRACT FROM AUTHOR]

The extension of social protection to all has become a central policy objective, both nationally and internationally. A considerable number of middle- and low-income countries have undertaken substantial efforts to extend social protection, while the international community reaffirmed its commitment to the extension of social protection through the adoption of the ILO Recommendation concerning National Floors of Social Protection, No. 202 (2012). This article reviews the legal provisions and the implementation of the Indian Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), legislated in 2005, and does so in the light of the more recent provisions of ILO Recommendation No. 202. Since its introduction ten years ago, MGNREGA has provided a source of income to rural workers, increased wage rates, achieved high female participation rates and created durable assets. India's local governance bodies, Panchayati Raj Institutions (PRI), have been empowered and involved in the processes of planning and monitoring. However, despite successes, there have been considerable shortcomings in implementation. This article highlights two central themes: first, the innovative policy framework of the Act, which brings together rights-based entitlements, demand-driven employment, and citizen-centred monitoring. Second, it assesses the accessibility and adequacy of benefits in the implementation of MGNREGA. We conclude that MGNREGA offers potential for South-South learning, both in terms of policy-design and implementation. [ABSTRACT FROM AUTHOR]

The growth of formal employment in the country has always been less than that of total employment, indicating a faster growth of employment in the informal sector. Available data suggests that within the formal sector also the proportion of unorganized workers is on the increase. While the sector contributes around half of the GDP of the county, its dominance in the employment front is such that more than 90% of the total workforce has been engaged in the informal economy. It is widely acknowledged that the informal sector in India suffers from a low productivity syndrome, compared to the formal sector. The prominent features of the sector are lower level wages, poor working and living conditions. The National Commission on Self-Employed Women in the Informal Sector which submitted its report a few years ago recommended the setting up of a separate wing in the union labour department to deal with the problems of unorganised labour. Still, there is no remarkable improvement in the working conditions of women workers in unorganized sector. This prevailing condition made the researchers to study "the morale of women workers in unorganized sector in Madurai city". [ABSTRACT FROM AUTHOR]

This study analyses data from household surveys in six large Chinese cities in 2010 to describe the nature of informal employment and estimate the returns to education in the formal and informal labour markets. It is estimated that 25.4 per cent of the urban workers are informally employed and 22.2 per cent of them work in the informal sector. Wage equations for informal and formal workers are also estimated by using OLS, Heckman selection correction models, switching regression models, and quantile regressions. The results show that the returns to education are lower for those working informally as compared to formal workers, and that the gap in returns is even larger for those working in the informal and formal sectors (4.2 per cent versus 11.1 per cent per year of schooling according to a switching regression model). The quantile regression results reveal that the returns to education increase at higher quintiles for informal employment but not for formal employment. The results suggest that the formal and informal sectors are characterised by labour market segmentation. [ABSTRACT FROM AUTHOR]

This study deals with the issue of employment vulnerability in the urban labour market in India. Vulnerability in the labour market has been defined with the help of various dimensions of employment such as size of the employment at the firm, place of work, type of work contract, and eligibility for social security benefits and for leave benefits. The vulnerability indicator and set of indices have been developed to capture the risks related to employment in the urban sector. The study finds that workers are vulnerable not only in the urban informal sector but also in the formal sector and the overall share of vulnerable workers has marginally risen during the period under study. The association between the extent of vulnerability and age, and the level of education and earnings distribution has been found to be negative. Vulnerability is high for workers in the informal sector, workers with part-time jobs, and with temporary jobs, and workers undertaking casual work. The analysis of vulnerability undertaken here has been extended to the local labour market in two cities in India--Delhi and Ranchi--during 2009-10. The findings at the national level have been substantiated by similar results pertaining to the incidence and intensity of vulnerability in these two distinctly separate labour markets. The study finds that workers are more vulnerable in Ranchi, particularly in the informal sector, than in Delhi. This can be attributed to the prevalence of a more active labour market in Delhi. The study concludes that the high intensity of vulnerability present in the urban labour market is partly explained by the increasing 'informalisation ' taking place in the labour market. It also highlights the need for a social protection mechanism and the growth of decent jobs. [ABSTRACT FROM AUTHOR]

In recent years, there has been an effort to clearly define informality along two axes, the legal status of the enterprise, that is, the informal sector, on one hand, and the job status of the worker, that is, informal employment, on the other. However, we argue that a strict duality of definitions hides the core characteristics and insecurity faced by the workers. While each of these perspectives reflects one or the other part of the informal economy, a recent view is that it is much more heterogeneous and complex than a sum of these parts (www.wiego.org). While the dualistic definition of the informal sector is useful to emphasise the stark contrast, two nuances have been added to the debate. First, there are strong inter-linkages between the formal and informal sectors, and second, there is more of a continuum of employment relationships in the economy rather than a dualistic structure. In this paper, we measure informality in employment in India by using alternative definitions of the informal sector and informal employment. We use both secondary and primary data for the analysis. We conclude that the ILO enterprise definition is useful for policies to upgrade the informal enterprises, understand the causes of low productivity in the sector and the impact of backward and forward linkages of firms on the growth of the informal enterprises, while the worker definition is useful for policies on labour regulation and social protection. However, employment relationships form a continuum, and several definitions and estimates help unravel the insecurities faced by workers and would better help to frame economic and social support policies for these workers. [ABSTRACT FROM AUTHOR]

Measured by the number of workers and work seekers, that is, the labour force, there has been a decline in the Labour Force Participation Rate (LFPR) in the Indian economy during the last decade or more. But this story has been complicated by an increase in the LFPR between 1999-2000 and 2004-05, and then a decline during 2004-05 and 2009-10, resulting in a situation of almost jobless growth during a period of high economic growth. This result has been arrived at on the basis of Usual Principal and Subsidiary Status (UPSS). By deploying another measurement--Usual Principal Status (UPS)--and restricting to the age group of 15-59 years, a different interpretation of job-creating economic growth has been put forward by one of the scholars. Further, a net transfer of workers from the unorganised (informal) to the organised (formal) sector has been hailed as the advent of a 'virtuous circle' in the Indian economy insofar as the growth--employment interaction is concerned. This paper dissects this transfer and finds that the increase in employment in the organised sector has been mostly of an informal kind, that is, without employment or social security provided by the employer. It further goes into this phenomenon of informalisation of employment in the formal sector and examines the plight of these 'informal workers' in the formal sector. The labour control regime and its attendant oppressive working conditions are examined to determine the quality of this employment. [ABSTRACT FROM AUTHOR]

In a developing country like India, the formal sector is a coveted employment destination. However, in the present scenario, the formal sector is unable to absorb the entire workforce. In view of these labour demand constraints in the formal sector, this paper sets out to explore the opportunities for the promotion of informal sector employment. It measures employment trends and patterns in the informal sector in India and estimates the sector's employment determinants using a large and nationally representative sample of individual data. The estimation also tests the hypothesis that the determinants of informal sector employment vary with the states’ development levels. Our findings reveal that individuals without any general or technical education have a greater probability of entering the informal sector. As education increases, this probability decreases in all the states irrespective of their development level. In some cases, results for the underdeveloped states contrast with the developing and developed states. For instance, individuals in the Other Backward Classes (OBC) category who always stay in the same employment catchment area have a greater probability of finding a job in the informal sector in the developed and developing states, while they have no exposure to finding a job in the informal sector in the underdeveloped states. Education (both general and technical) and migration are the main policy variables for the promotion of employment. [ABSTRACT FROM PUBLISHER]

Small, informal enterprises play an important role in shaping the growth of a developing economy undergoing a process of structural reforms. The informal sector as defined in the resolution of the 15th International Conference of Labour Statisticians (ICLS), January 1993, consists of unincorporated household enterprises which differ from formal enterprises in terms of technology, economies of scale, use of labor intensive processes, and virtual absence of well maintained accounts. Although the informal sector has been characterized as above, no clear-cut operational definition of informal sector is available for the purpose of data collection. In India and in other developing countries in Asia and the Pacific, however, the 'unorganized' segment of the economy closely approximates the ICLS concept of the informal sector. The unorganized segment is labor intensive and provides employment to a sizable section of the population. This paper examines the problems of measuring the unorganized sector and explains the approach taken by the Indian Central Statistical Office. The size of the informal sector is examined in terms of the employment it generates and its contribution to value added. [ABSTRACT FROM AUTHOR]

Kappadath Parameswara Menon Kannan discusses two recent initiatives for providing social security to Indian workers in the informal economy. He looks at the National Rural Employment Guarantee and the Social Security for Unorganized (Informal) Workers as landmark initiatives that indicate an important turnaround in the emerging developmental policy in the country. [ABSTRACT FROM AUTHOR]

Informal sectors constitute the dominant economic activities in Bangladesh as far as their contribution to the GDP and employment are concerned. Studies have indicated that around 80 per cent of the labour force in Bangladesh works in the informal economy and that the contribution of the informal sector to the GDP is around 64 per cent. The major informal sector in Bangladesh is the agricultural sector. In addition, a large number of small and medium enterprises (SMEs) and micro enterprises fall into the category of the informal sector. This paper conducts a Computable General Equilibrium (CGE) analysis on the informal sector in Bangladesh by reconstructing the social accounting matrix of Bangladesh, which decomposes the sectors into formal and informal. The simulation exercise suggests that the growth in the formal sector leads to a growth in the informal sector as well, and that there are positive impacts on household welfare and poverty. The major driving forces behind the growth in the informal sector would be the rise in the household demand for informal sector goods and services as well as the rise in demand for intermediate inputs. It is, however, important to note that though in absolute terms, the informal sector expands, in relative terms, such a scenario would result in the contraction of the informal sector as the formal sectors expands at a higher rate than the informal sector. [ABSTRACT FROM AUTHOR]

La globalización y las reformas económicas afectan por lo común al sector formal, pues el informal se halla al margen de las normas. Sin embargo, debido a los numerosos nexos que hay entre ambos, también en el sector informal se dejan sentir sus efectos de diversas maneras. El modelo teórico que se utiliza tradicionalmente para entender el impacto de estas fuerzas se basa en la fragmentación del mercado de trabajo y en las migraciones: los trabajadores que son despedidos en el sector formal engrosan la oferta de mano de obra informal, lo cual causa un descenso de los salarios y un aumento de la pobreza. El autor indaga si estos fenómenos se han dado en la India tras las reformas económicas del decenio de 1990, usando para ello un modelo basado en las variaciones de la oferta y de la demanda causadas por la «externización», las transferencias de trabajadores cualificados y las nuevas empresas. [ABSTRACT FROM AUTHOR]

The article presents a study on the various aspects of the occupational life of rickshaw pullers in Haryana, India. It states that cycle rickshaw pulling is an important occupation of the informal sector as million of poor people try to meet their own economic and employment needs. It adds that the activities of the informal sector has contributed more than one third of the national income of the country but they are not recognized, regulated or protected by the legal and regulatory frameworks.

The article discusses the establishment of the National Commission for Enterprises in the Unorganized Sector (NCEUS) in India in 2004. It describes the organization's initiatives which are aimed at providing better working conditions and social security for the workers employed in the unorganized sector in the country. It offers insights on the two major reports prepared by NCEUS with the aim to highlight the importance of the informal economy and the plight of workers employed in it. Finally, it deals with the three sets of proposals submitted by the NCEUS to the Indian government including a national minimum social security scheme, minimum conditions of work for wage workers, and promotional measures to reduce poverty.

The aim of this paper is to highlight the role of the informal sector in the Indian economy. The paper notes that in occupational distribution in India, particularly during the 1970s, it is the informal sector (I-sector) which accounted for most of the increase in non-agricultural employment and that this growth of I-sector employment occurred not only in activities traditionally thought to be associated with the I-sector expansion (such as trade, construction and services) but also importantly in manufacturing, and there is a strong presumption that the manufacturing segment of the informal sector expanded faster than its services segment. Evidence further suggests that the I-sector was not a passive absorber of labour but a dynamic sector responding successfully to changing demand in the economy and contributing significantly to income and output. The paper also offers a hypothesis that, simultaneously with these changes in economic structure, there is likely to have occurred a change in the composition of rural-urban migrants with the share of those who go to the informal sector and have only informal sector jobs as their targets (usually members of the poorer households in the rural areas) increasing and that of those who go to the formal sector (usually well-educated members of the relatively well-to-do land-owning families in the rural areas) declining; further, migration by the members of the poorer rural households is likely to have increased not because their rural income declined but because the informal sector income increased. [ABSTRACT FROM AUTHOR]

A basic hypothesis of probabilistic migration models is that informal sector employment is a temporary staging post for new migrants on their way to formal sector employment. In this paper we argue that there are no conclusive tests of this hypothesis in the empirical migration literature, and examine evidence from a sample survey to test if the informal sector in Delhi performs the role postulated in probabilistic models. We also test some of the main hypotheses of the segmented labour market theory, a popular alternative to neo-classical theory for analyzing the structure of urban labour market in developing countries. The empirical evidence indicates that the migration process postulated in probabilistic models does not seem to be realistic in the case of Delhi, and that the segmentation model is only partially valid. Over one-half of the informal sector entrants had been attracted to Delhi by opportunities in this sector itself; actual and potential mobility from the informal to the formal sector was low; education and urban experience were rewarded at the same rate in both sectors; and education was one of the important determinants of mobility between sectors. [ABSTRACT FROM AUTHOR]

• Conducts impact evaluation of minimum wage legislation for domestic workers in India. • Significant positive impact of legislation on wages is observed in the short-run. • While there seems no evidence of this effect persisting in the long run. • Evidence suggests nil effect on employment. • Available evidence seems to point at weak enforcement as the main driving factor. What impact does minimum wage legislation have on wages and employment opportunities in an informal sector in a developing country? The paper answers this question in the context of minimum wage legislation for domestic workers in India over the period of 2004–2012. Combining, matching procedure with difference-in-difference estimation approach, supported by extensive robustness checks, the paper estimates both the short-run and the long-run impact of the legislation on real wages and employment. Results show a positive impact of the legislation on real wages in the shortrun, while there is limited evidence of this effect persisting in the long-run. Further, the legislation did not seem to have any impact at the extensive margin on the probability of being employed as a domestic worker over short or long run. Our analysis further reveals that the wages of majority of workers remain below the minimum wage. Available evidence from the ground, in line with theoretical predictions, point towards weak enforcement of the legislation as the potential driving factor of observed results. As India recently extended national level minimum wage for all workers, the paper provides a cautionary tale on the potential pitfalls of implementation of this legislation in informal sector and suggests some ways to overcome the same. [ABSTRACT FROM AUTHOR]

Theory and economic intuition suggest that domestic institutions influence the employment impact of economic reform, but the evidence base is thin. This paper seeks to address this by examining the extent to which differences in regional labour market flexibility shaped the impact of unanticipated economic reforms on employment in informal (unregistered) manufacturing enterprises in India (1990–2001). It employs a difference-in-differences strategy and finds that tariff reductions are not associated with significant employment shifts in informal enterprises, a finding that may be attributable to the fact that these enterprises rarely engage in international trade. However, on average and ceteris paribus, delicensing (FDI reform) is associated with statistically significant increases (increases) in informal employment and informal enterprise numbers in inflexible (flexible) labour markets. There is some evidence that the delicensing effect is attributable to increases in product market competition in delicensed industries. However, the channel underlying the result associated with FDI reform is less clear. In light of the persistent primacy of the informal sector in India and other developing economies, these findings have substantial policy relevance. [ABSTRACT FROM AUTHOR]