Does labor composition impact the transmission of monetary policy to output?

• 成果类型: Article
• 署名作者: Bujunoori, Raja Reddy; Mannil, Nithin; Tantri, Prasanna
• 署名单位: Indian School of Business (ISB); University of London; London School Economics & Political Science
• 刊物名称: JOURNAL OF DEVELOPMENT ECONOMICS
• ISSN/ISSBN: 0304-3878
• DOI: 10.1016/j.jdeveco.2023.103241
• 发表日期: 2024
• 关键词: Monetary policy transmission; Contract workers; wage rigidity

摘要

We ask whether the presence of contract workers influences the sensitivity of firm output to monetary policy shocks. We use a judgment of the Supreme Court of India that facilitated the hiring of contract workers as a setting that exogenously increased their presence, especially in states with stringent labor laws. Difference -indifferences and triple -difference tests show that the sensitivity of output to monetary policy shocks moderates due to the presence of contract workers. The relative flexibility of contract workers' wages and not the relative ease of hiring/firing is the mechanism. Additional analysis shows that the moderation in output sensitivity is stronger during monetary contractions.