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Import Competition, Formalization, and the Role of Contract Labor (الإنجليزية)

Does higher import competition increase formalization and aggregate productivity? Exploiting plausibly exogenous variation from Chinese imports, we provide empirical causal evidence that higher imports increase the share of formal manufacturing enterprise employment in India. This formal share increase is due to both the rise in formal-enterprise employment driven by high-productivity firms, and a fall in informal-enterprise employment. The labor...
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