Vidhya Soundararajan

Research Areas

Firms · Labor Markets · Trade & Industrial Policy · Finance & Credit · Development

Working Papers

1. When Protection Ends: Evidence from Differentiated Product Markets

with Kamalesh Pahurkar

We study the dismantling of India's small-scale industry product reservation policy and show how increased competition affects product quality, variety, prices, and consumer welfare.

Submitted. [SSRN] [CAFRAL Working Paper]

2. Credit Supply Shocks, Reallocation, and Real Outcomes

with Aishwarya Bhamidipati, Nishant Kashyap and Prasanna Tantri

We study how regulatory interventions in banks generate local credit-supply shocks, how credit is reallocated across lenders, and the consequences for real economic activity.

[SSRN] [CAFRAL Working Paper]

3. Quality Responses to Foreign Direct Investment Liberalization

with Kamalesh Pahurkar and Krishnan Narayanan
 

We study how FDI liberalization changes the product-quality choices of domestic firms and show that responses differ substantially across firms' initial positions in the quality distribution.

[SSRN] 

4. Inflation Targeting, Monetary Policy Surprises, and Capital Misallocation 

with Vaibhav Nainwal and Rajeswari Sengupta 

We study whether credible monetary policy improves the allocation of capital across firms and how monetary-policy shocks affect firms with different marginal products of capital.

[SSRN] 

Publications

5. Implementation of Labor Laws and Informality

with Ritam Chaurey and Gaurav Chiplunkar
forthcoming, JPE: microeconomics · 2026

How restrictions on contract employment affect firms' choices between formal and informal production.

[Published Version] [SSRN] 

6. Do Rural Roads Promote Inclusive Entrepreneurship?

with Ananyo Brahma
Journal of Economic Behavior & Organization · 2026

We study whether improved rural connectivity promotes entrepreneurship and whether these gains extend to historically disadvantaged groups.

[Published Version] [SSRN] [Ideas for India]

7. Import Competition, Formalization, and the Role of Contract Labor

with Pavel Chakraborty and Rahul Singh
World Bank Economic Review. 2024

We show that import competition leads formal manufacturing firms to increase their use of contract workers, identifying an important margin through which firms adjust employment relationships in response to trade shocks.

[Published Version] [IZA Discussion Paper] [Ideas for India]

8. Political Activism as a Determinant of Strategic Transfers: Evidence from an Indian Public Works Program

with Nancy Chau and Yanyan Liu
European Economic Review · 2021

We examine how political activism affects the allocation of benefits from a large public-works program.

[Published Version] [IZA Discussion Paper]

9. Estimating Small Area Population Density Using Satellite Imagery: An Application to Sri Lanka

with Ryan Engstrom and David Newhouse
PLOS ONE · 2020

We develop an approach combining satellite imagery and survey data to estimate population density at fine spatial scales.

[Published Version] [SSRN] [World Bank policy paper]

10. Contract Employment as a Worker Discipline Device

with Arnab Basu and Nancy Chau
Journal of Development Economics · 2021

We study how firms use contract employment as a worker-discipline mechanism and the implications for employment relationships in developing-country labor markets.

[Published Version] [IZA Discussion Paper]

11. Wage Fairness in a Subcontracted Labor Market

with Nancy Chau and Arnab Basu
Journal of Economic Behavior & Organization · 2019

We examine wage determination and fairness when workers are employed through subcontracting arrangements.

[Published Version] [IZA Discussion Paper]

12. Employer Power and Employment in Developing Countries

with Nancy Chau and Ravi Kanbur
In The Future of Work in Developing Countries, Columbia University Press

We examine the role of employer market power in shaping employment and labor-market outcomes in developing economies.

[Book Chapter] [SSRN]

13. Contract Employment in Developing Countries

with Arnab Basu and Nancy Chau
Handbook of Labor, Human Resources and Population Economics

A synthesis of the economics of contract employment and its implications for workers and firms in developing countries.

[Handbook Chapter]

14. Heterogeneous Effects of Imperfectly Enforced Minimum Wages in Low-Wage Labor Markets

Journal of Development Economics, 2019

How imperfect enforcement and employer market power shape the employment and wage effects of minimum wages.

[Published Version] 

Policy Research and Other Working Papers

1. Priority Sector Lending in India: Policy Design, Trends, and Challenges

     with Sankalp Mathur.  Economic and Political Weekly · Forthcoming

2. Financialization of Indian Households: Trends in Savings and Borrowing

    with Aishwarya Bhamidipati, Twincle Halder and Vijayshree Jayaraman. [CAFRAL Policy Paper] [Ideas for India]

3. Regional Inequality Compared: The Cases of India and Brazil
   with Alexandre de Freitas Barbosa and Gerry Rodgers · Indian Journal of Economics, 2016.

4. Patterns of Inequality in the Indian Labour Market, 1983–2012
   with Gerry Rodgers · Academic Foundation and Institute for Human Development, 2016.

5. What Dimensions of Women's Empowerment Matter Most for Child Nutrition?
   with Priya Bhagowalia, Purnima Menon and Agnes Quisumbing · [IFPRI Discussion Paper].

6. Construction Workers: Amending the Laws for More Safety
   Economic and Political Weekly, 2013. [published version]

Media and Policy

1. How to Successfully Set a Minimum Wage in India, Oct 24, 2018. Live Mint.                               

2. The MSME sector is critical in times of Covid-19, Apr 03, 2020. Hindustan Times

3. Disentangling the labour laws debate: What does the evidence really say? , May 25, 2020. Hindustan Times

4. Import competition, formalisation, and role of contract workers, 27 January 2021, Ideas for India 

5. Need focus on removing obstacles to ‘good’ jobs, Jan 20, 2021, Hindustan Times

6. Employer power and employment in developing countries,  12 Oct 2022, VoxEU

7. For gig workers, e-Shram registration is just the start, Feb 12, 2025, Hindustan Times, 

8. Do rural roads promote inclusive entrepreneurship? Jul 22, 2025, Ideas for India. 

9. Women's entrepreneurship: Time for a holistic strategy, Jul 22, 2025, Mint

10. India’s patent landscape: universities as changemakers, Aug 20, 2025, The Hindu

11. India's Labour Codes: Towards a Coherent and Modern Regulatory Framework, November 27, 2025,  The Daily Pioneer

12. Financialization of Indian Households: Trends in savings and borrowing (with Aishwarya Bhamidipati, Twincle Halder, and Vijayshree Jayaraman). Ideas for India. May 26, 2026.