01900cas a2200265 a 4500 AALejournalIMF021479 230101c9999 xx r poo 0 0eng d 5.00 USD 9781513570679 1018-5941 BD-DhAAL BD-DhAAL Mohommad, Adil. Resource Misallocation in India : The Role of Cross-State Labor Market Reform / Adil Mohommad, Charlotte Sandoz, Piyaporn Sodsriwiboon. Washington, D.C. : International Monetary Fund, 2021. 1 online resource (34 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students At the macro level, productivity is driven by technology and the efficiency of resource allocation, as outcomes of firms' decision making. The relatively high level of resource misallocation in India's formal manufacturing sector is well documented. We build on this research to further investigate the drivers of misallocation, exploiting micro-level variation across Indian states. We find that states with less rigid labor markets have lesser misallocation. We also examine the interaction of labor market rigidities with informality which is a key feature of India's labor markets. Our results suggest that reducing labor market rigidities in states with high informality has a net positive effect on aggregate productivity. Mode of access: Internet Sandoz, Charlotte. Sodsriwiboon, Piyaporn. IMF Working Papers; Working Paper ; No. 2021/051 Full text available on IMF http://elibrary.imf.org/view/journals/001/2021/051/001.2021.issue-051-en.xml IMF e-Library