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Ritika Jain
''Influence of Political Alignment and Federal Structure on Public Sector Employment: The case of India''
( 2017, Vol. 37 No.1 )
The study examines political alignment and central government's influence on employment in enterprises owned by the state governments in the Indian context. Using data on 625 Indian SLPEs between 2007-08 and 2009-10, the study employs regression and propensity score matching methods to understand the effect of these variables on employment outcomes. The results suggest that employment in SLPEs is higher if the SLPE is located in a state that is run by the same party that governs the Centre. Further, SLPE employment rises with a rise in the loan amount given by the Centre to these enterprises. In fact, the effect of Centre loans on employment in SLPE is stronger if the SLPE operates in a politically aligned (with Centre) state.
Keywords: Employment, political alignment, federal structure, public sector enterprises, propensity score matching
JEL: H1 - Structure and Scope of Government: General
J6 - Mobility, Unemployment, and Vacancies: General
Manuscript Received : Dec 02 2016 Manuscript Accepted : Feb 22 2017

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