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The Regulation of Labor

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  • Juan Botero
  • Simeon Djankov
  • Rafael Porta
  • Florencio C. Lopez-De-Silanes

Abstract

We investigate the regulation of labor markets through employment, collective relations, and social security laws in 85 countries. We find that the political power of the left is associated with more stringent labor regulations and more generous social security systems, and that socialist, French, and Scandinavian legal origin countries have sharply higher levels of labor regulation than do common law countries. However, the effects of legal origins are larger, and explain more of the variation in regulations, than those of politics. Heavier regulation of labor is associated with lower labor force participation and higher unemployment, especially of the young. These results are most naturally consistent with legal theories, according to which countries have pervasive regulatory styles inherited from the transplantation of legal systems. © 2004 MIT Press

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Bibliographic Info

Article provided by MIT Press in its journal The Quarterly Journal of Economics.

Volume (Year): 119 (2004)
Issue (Month): 4 (November)
Pages: 1339-1382

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Handle: RePEc:tpr:qjecon:v:119:y:2004:i:4:p:1339-1382

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Web page: http://mitpress.mit.edu/journals/

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  1. Fonseca, Raquel & Lopez-Garcia, Paloma & Pissarides, Christopher A., 2001. "Entrepreneurship, start-up costs and employment," European Economic Review, Elsevier, vol. 45(4-6), pages 692-705, May.
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    by Masa in Devecondata on 2009-11-27 16:39:00
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