Working Papers
Evolving Occupations or Occupation-status? Employment Polarization in the Context of Developing Countries (with Arka Roy Chaudhuri and Tridip Ray)
Abstract: This paper investigates the phenomenon of job polarization in the context of developing countries. Our study provides a novel approach for studying employment polarization by considering organizational factors specific to labour markets in developing economies. We do not find evidence of job polarization but record occupation-status polarization in India and Indonesia where status refers to the type of employment contract. Using endogenous clustering, we show that worker statuses are likely to have different skills even within the same occupation. We posit that occupation-status should be the primary unit of analysis when studying job polarization in developing countries.
Do Clouds have a Silicon Lining for Firms? Contract Hiring and Computer Investment: Evidence from Rainfall Shocks (with Arka Roy Chaudhuri and Tridip Ray)
Abstract: Using Indian firm-level data from 2000 to 2010, we analyze how firms change hiring decisions due to change in computer capital, in the face of exogenous demand shocks, arising from district-level rainfall shocks. We find firms with greater than average share of computer capital, is associated with a decline in hiring or firing by 2.32 contract workers, when exposed to demand shocks. Our results are robust to a wide range of alternative measures such as computer capital share in expenditure, US based measures, among others. We also find that the results are driven by contract workers involved in the main production process (and not for workers carrying out peripheral activities). We conclude that firms investing relatively more in computer capital reduce the number of contract workers hired when exposed to positive demand shocks, suggesting labour-saving impact of technology at play.
The Heat is on: Temperature and Test Scores in India
Abstract: This study investigates the impact of temperature on exam scores. Studies have shown that heat has a negative impact on human cognition and physiology, leading to an adverse effect on economic outcomes such as health, labour productivity and human capital formation. I look at how exam-time temperature affects exam scores from a unique dataset from the Central Board of Secondary Education (CBSE) in India. I find that a one standard deviation increase in temperature leads to a decrease in exam scores by 0.016 standard deviations for the period 2012-2015. As a potential mechanism, I show that the impact on scores is through a physiological channel by comparing the effect on scores between genders. In line with the literature, I find that, compared to females, male students perform relatively worse during exams due to heat, possibly due to physical stress. I also find evidence that adaptation to heat can partially mitigate the effect of temperature on exam scores.
Labour Market Effects of R&D Tax: Evidence from a Quasi-natural Experiment (with Pavel Chakraborty, Sankalp Mathur and Rubina Verma)
Abstract: Do firms with heterogeneous in-house R&D capacity respond discordantly in terms of product development to an industrial policy aimed at boosting R&D expenditure? We utilize an R&D tax credit policy introduced in 1998 by the Indian Government and aimed at firms with in-house R&D units in certain groups of industries. We categorize firms as small, medium and large, using information of their R&D expenses. Our results imply that R&D tax credit policy increase R&D expenses for all firms, but the effect on product development is quite different. Small firms spend their R&D investments to expand product scope, while large firms invest in upgrading the quality of the products they produce. These effects are largely driven by exporters and firms producing differentiated products. We rationalize our findings using a heterogeneous firm model in which a firm maximizes output along three dimensions: product scope, scale, and quality. To the best of our knowledge, ours is one of the first to show that R&D tax credit policy and its interaction with heterogeneous R&D capacity can have distinctly different effects on product development.