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Prof. Chetan Subramanian to present paper titled ‘Asymmetric Business Cycles in Segmented Labour Markets’ on May 05 as part of IIMB Chair of Excellence & Endowed Chair Seminar Series

30 April, 2021, Bengaluru: Professor Chetan Subramanian, faculty in the Economics & Social Sciences area of IIM Bangalore, will present a paper titled, ‘Asymmetric Business Cycles in Segmented Labour Markets’, on May 05 (Wednesday), 2021, from 04.00 pm to 05.00 pm, as part of the IIMB Chair of Excellence and Endowed Chair Seminar Series. Prof. Subramanian is also the Dean, Faculty at IIM Bangalore.

The co-authors of the paper are Prof. Srinivasan Murali, faculty in the Economics & Social Sciences area and IIMB Young Faculty Research Chair, Abhishek Naresh and Jong Kook Shin.

Please note: Those interested need to register at: https://iim-b.zoom.us/webinar/register/WN_8f76oqYYQ9-JPi7TL-b5LA

The Webinar Link and Passcode will be shared with the registered participants.

Abstract of paper: The paper documents the presence of asymmetric business cycles in both regular and contract labour markets in India and investigates the role of nominal wage rigidities and labour adjustment costs in accounting for these asymmetries. Using data from Annual Survey of Industries, it is found that (i) the growth rate of output is negatively skewed (ii) the growth of regular employment is negatively skewed while that of contract employment is positively skewed (iii) the nominal wage growth of regular workers is positively skewed while that of contract workers is negatively skewed. The paper highlights that a standard business cycle model augmented with asymmetric wage adjustment cost for both regular and contract labour coupled with symmetric labour adjustment cost for regular workers does a good job of explaining the asymmetries in both output and employment cycles. It is also found that the presence of contract labour relaxes the constraint of downward nominal wage rigidity, and hence decreases the optimal level of grease inflation required in the economy.