Labour Regulations, Growth and Employment: A South Asian Perspective

Abstract

Drawing on the experience of four South Asian economies (Bangladesh, India, Pakistan, Sri Lanka), this article argues that properly designed labour market institutions and regulations play a pivotal role in engendering desirable economic and social dividends. The alternative is a Hobbesian world of an unregulated labour market, which is likely to produce poor wages and working conditions. Policymakers in the region should acknowledge common challenges pertaining to low utilisation of the skills and talents of young people, entrenched gender disparities, high, and in many cases rising, informality, significant incidence of working poverty and vulnerability. They should focus on designing complementary interventions to tackle such shared challenges rather than being fixated on the narrowly conceived notion of deregulating labour markets.