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Job creation and labor reform in Latin America

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  • Kaplan, David S.

Abstract

This paper studies the effects of labor-regulation reform using data for 10,396 firms from 14 Latin American countries. Firms are asked both how many permanent workers they would have hired and how many they would have terminated if labor regulations were made more flexible. I find that making labor regulations more flexible would lead to an average net increase of 2.08 percent in total employment. Firms with fewer than 20 employees would benefit the most, with average gains in net employment of 4.27 percent. Countries with more regulated labor markets would experience larger gains in total employment. These larger gains in total employment, however, would be achieved through higher rates of hiring and higher rates of termination. These results may explain why there is substantial opposition to labor reforms despite the predicted gains in efficiency and total employment. Journal of Comparative Economics 37 (1) (2009) 91-105.

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Bibliographic Info

Article provided by Elsevier in its journal Journal of Comparative Economics.

Volume (Year): 37 (2009)
Issue (Month): 1 (March)
Pages: 91-105

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Handle: RePEc:eee:jcecon:v:37:y:2009:i:1:p:91-105

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Web page: http://www.elsevier.com/locate/inca/622864

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Keywords: Labor-market reforms Worker flows Job flows;

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References

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Citations

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Cited by:
  1. Menezes, Naercio Filho & Scorzafave, Luiz, 2009. "Employment and Inequality of Outcomes in Brazil," Ibmec Working Papers wpe_200, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  2. Justo de Jorge Moreno & Leopoldo Laborda Castillo & Fernando Merino de Lucas, 2011. "La empresa industrial de América Latina: Análisis de la eficiencia mediante grupos estratégicos," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 165-192, January-D.
  3. Angel-Urdinola, Diego F. & Kuddo, Arvo, 2010. "Key characteristics of employment regulation in the Middle East and North Africa," Social Protection Discussion Papers 55674, The World Bank.
  4. Margareta Drzeniek-Hanouz & Irene Mia & Eva Trujillo Herrera, 2009. "Measuring the Competitiveness of Selected CARICOM Countries: The Findings of the Global Competitiveness Index 2009-2010: Private Sector Development Discussion Paper #1," IDB Publications 67058, Inter-American Development Bank.
  5. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
  6. Kuddo, Arvo, 2009. "Labor laws in Eastern European and Central Asian countries : minimum norms and practices," Social Protection Discussion Papers 51698, The World Bank.

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