Table 7: DiD with treatment group split by contract labor employment above and below 50

||(1)<br>Log<br>total workers|(2)<br>Log<br>regular workers|(3)<br>Log<br>contract workers|(4)<br>Share of<br>contract workers|(5)<br>Likelihood of<br>usinganycontract work|(6)<br>Implicit cost<br>of Labor|
|---|---|---|---|---|---|---|
|RJ * Treatment L (_<_50 cont) * Post|0.061|-0.072|0.534*|0.059*|0.084|-0.146*|
||(0.071)|(0.116)|(0.278)|(0.033)|(0.060)|(0.081)|
|RJ * Treatment L (51+ cont) * Post|-0.018|-0.338***|1.221***|0.157***|0.224***|-0.120|
||(0.081)|(0.121)|(0.262)|(0.032)|(0.050)|(0.100)|
|Observations|66,909|66,909|66,909|66,909|66,909|66,909|
|R-squared|0.027|0.023|0.010|0.008|0.005|0.083|
|Number of fact<br>~~n~~um|10,470|10,470|10,470|10,470|10,470|10,470|
|Firm FEs|Y|Y|Y|Y|Y|Y|
|Year Dummies|Y|Y|Y|Y|Y|Y|
|F-test|1.118|4.534|6.648|7.690|6.692|0.0711|
|Prob¿F|0.290|0.0332|0.00994|0.00556|0.00970|0.790|

Note: Sample restricted to firms with more than 100 workers. Treatment refers to firms with 100-300 workers. All dependant outcome variables represented in log forms here have been assigned an underlying value of 1 when they take a value of zero. Share of contract workers is defined as the share of contract worker in total worker hours used by the firm for that year. Implicit cost is defined using the expenditure on all raw materials as a base. Standard errors in parentheses, clustered at the firm level. *** p _<_ 0.01, ** p _<_ 0.05, * p _<_ 0.1.) 5). This adds to the evidence suggesting that the estimated treatment effects are not ascribable to the CLA amendment.

Table 8: DiD: Im licit Costs S lit b Contract and Permanent Workers <u>p p y</u>

|VARIABLES|(1)<br>All frms<br>Implicit cost<br>contract workers|(2)<br>All frms<br>Implicit cost<br>regular workers|(3)<br>contract_≤_50<br>Implicit cost<br>contract workers|(4)<br>contract_≤_50<br>Implicit cost<br>regular workers|(5)<br>contract_>_50<br>Implicit cost<br>contract workers|(6)<br>contract_>_50<br>Implicit cost<br>regular workers|
|---|---|---|---|---|---|---|
|RJ * Treatment L * Post|-2.348***|0.131|-1.876|0.368|-3.275***|-0.032|
||(0.816)|(0.221)|(1.335)|(0.366)|(0.906)|(0.229)|
|Observations|66,909|66,909|41,231|41,231|25,678|25,678|
|R-squared|0.005|0.022|0.023|0.031|0.075|0.014|
|Number of fact<br>~~n~~um|10,470|10,470|6,816|6,816|3,654|3,654|
|Firm FEs|Y|Y|Y|Y|Y|Y|
|Year Dummies|Y|Y|Y|Y|Y|Y|

Note: Sample restricted to firms with more than 100 workers. Treatment refers to firms with 100-300 workers. All dependent outcome variables represented in log forms here have been assigned an underlying value of 1 when they take a value of zero. Share of contract workers is defined as the share of contract worker in total worker hours used by the firm for that year. Implicit cost is defined using the expenditure on all raw materials as a base. Standard errors in parentheses, clustered at the firm level. *** p _<_ 0.01, ** p _<_ 0.05, * p _<_ 0.1.) Finally, we present analysis suggesting that the strength of the impact of the IDA amendment is linked to the inherent technological viability of contract labor in firms. Following the method used in Rajan and Zingales (1998), we proxy for the inherent viability of (or dependence on) contract labor in firms by using national averages of contract labor intensity by industry. Specifically, we measure the national average firm level share of contract labor in total employment in each industry, and classify industries with above (resp., below) median contract labor share as high (resp., low) contract labor intensity industries. Our assumption is that industries with higher 27