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Shanti Nataraj
Shanthi Nataraj is an economist at the RAND (Research and Development) Corporation, where she conducts research in the areas of labour markets, workforce economics, and firm growth. She is currently co-leading two studies examining workers’ transitions between formal jobs, casual work, and self-employment in Bangladesh, as well as workers’ willingness to pay for specific job attributes associated with formality. She has also examined the effects of trade and industrial policies on employment and productivity growth among formal and informal manufacturing firms in India, studied the effects of tax policies, labour market regulations, and industrial policies on the high-tech firm growth in China, and analysed the impacts of labour regulations on employment in low-income countries.
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How did de-reservation of small-scale industry affect employment?
To protect small, labour-intensive manufacturing enterprises and boost employment, the Indian government reserved certain products for exclusive production by such enterprises. This policy was gradually phased out during 1997-2015. This column finds that dismantling of the reservation, in fact, led to increases in overall employment, driven by entrants into the de-reserved product space and incumbents that were previously constrained by the policy’s size limits.
