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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-Filho, Naercio & Scorzafave, Luiz, 2009. "Employment and Inequality of Outcomes in Brazil," Insper Working Papers wpe_200, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
  2. World Bank, 2010. "Cape Verde : Initial Assessment of the Formal Labor Market," World Bank Other Operational Studies 2986, The World Bank.
  3. Kuddo, Arvo, 2009. "Labor laws in Eastern European and Central Asian countries : minimum norms and practices," Social Protection Discussion Papers 51698, The World Bank.
  4. 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.
  5. repec:idb:brikps:67058 is not listed on IDEAS
  6. Djankov, Simeon & Ramalho, Rita, 2008. "Employment Laws in Developing Countries," CEPR Discussion Papers 7097, C.E.P.R. Discussion Papers.
  7. Gallagher, Mary & Giles, John & Park, Albert & Wang, Meiyan, 2013. "China's 2008 labor contract law : implementation and implications for China's workers," Policy Research Working Paper Series 6542, The World Bank.
  8. Umidjon Abdullaev & Marcello Estevao, 2013. "Growth and Employment in the Dominican Republic," IMF Working Papers 13/40, International Monetary Fund.
  9. Diego F. Angel-Urdinola & Arvo Kuddo, 2011. "Key Characteristics of Employment Regulations in the Middle East and North Africa," World Bank Other Operational Studies 10893, The World Bank.
  10. International Finance Corporation & World Bank, 2008. "Doing Business 2009 : Comparing Regulation in 181 Economies," World Bank Publications, The World Bank, number 6313, October.
  11. Almeida, Rita K. & Poole, Jennifer Pamela, 2013. "Trade and Labor Reallocation with Heterogeneous Enforcement of Labor Regulations," IZA Discussion Papers 7358, Institute for the Study of Labor (IZA).

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