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Labor Market Regulation and the Legal System

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Author Info
Carsten Hefeker ()
Michael Neugart ()

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Abstract

When enacting labor market regulation governments face courts that interpret and implement the legal code. We show that the incentives for governments for labor market reform increase with the uncertainty that is involved in the implementation of legal codes through courts. Given that judges have more discretion in common as opposed to civil law systems more reform activity as a response to crises should be observed in the former system. This finding is backed by evidence from a panel of OECD countries.

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File URL: http://www.cesifo-group.de/DocCIDL/cesifo1_wp2041.pdf
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Publisher Info
Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number CESifo Working Paper No. 2041.

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Date of creation: 2007
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Handle: RePEc:ces:ceswps:_2041

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Related research
Keywords: labor market regulation; labor courts; uncertainty; unemployment;

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Find related papers by JEL classification:
D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy-Making and Implementation
K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

References listed on IDEAS
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  1. Gruner, Hans Peter, 2002. " Unemployment and Labor-Market Reform: A Contract Theoretic Approach," Scandinavian Journal of Economics, Blackwell Publishing, vol. 104(4), pages 641-56, December. [Downloadable!] (restricted)
  2. Gerard Roland, 2002. "The Political Economy of Transition," Journal of Economic Perspectives, American Economic Association, vol. 16(1), pages 29-50, Winter. [Downloadable!] (restricted)
  3. Richard B. Freeman, 2005. "Labour Market Institutions Without Blinders: The Debate over Flexibility and Labour Market Performance," NBER Working Papers 11286, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. David H. Autor, 2003. "Outsourcing at Will: The Contribution of Unjust Dismissal Doctrine to the Growth of Employment Outsourcing," Journal of Labor Economics, University of Chicago Press, vol. 21(1), pages 1-42, January. [Downloadable!]
  5. Alesina, A. & Drazen, A., 1991. "Why Are Stabilizations Delayed?," Papers 6-91, Tel Aviv - the Sackler Institute of Economic Studies.
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  6. Roe, Mark J., 2007. "Juries and the political economy of legal origin," Journal of Comparative Economics, Elsevier, vol. 35(2), pages 294-308, June. [Downloadable!] (restricted)
  7. Klerman, Daniel & Mahoney, Paul G., 2007. "Legal origin?," Journal of Comparative Economics, Elsevier, vol. 35(2), pages 278-293, June. [Downloadable!] (restricted)
  8. Simeon Djankov & Rafael La Porta & Florencio Lopez-De-Silanes & Andrei Shleifer, 2002. "The Regulation Of Entry," The Quarterly Journal of Economics, MIT Press, vol. 117(1), pages 1-37, February. [Downloadable!] (restricted)
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  9. Nicola Gennaioli & Andrei Shleifer, 2007. "The Evolution of Common Law," Journal of Political Economy, University of Chicago Press, vol. 115, pages 43-68. [Downloadable!] (restricted)
  10. Rafael La Porta & Florencio Lopez-de-Silanes & Cristian Pop-Eleches & Andrei Shleifer, 2004. "Judicial Checks and Balances," Journal of Political Economy, University of Chicago Press, vol. 112(2), pages 445-470, April. [Downloadable!] (restricted)
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  11. Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer & Robert W. Vishny, 1998. "Law and Finance," Journal of Political Economy, University of Chicago Press, vol. 106(6), pages 1113-1155, December. [Downloadable!] (restricted)
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  12. Ichino, Andrea & Polo, Michele & Rettore, Enrico, 2003. "Are judges biased by labor market conditions?," European Economic Review, Elsevier, vol. 47(5), pages 913-944, October. [Downloadable!] (restricted)
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  13. Davin Chor & Richard B. Freeman, 2005. "The 2004 Global Labor Survey: Workplace Institutions and Practices Around the World," NBER Working Papers 11598, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  14. Edward L. Glaeser & Andrei Shleifer, 2002. "Legal Origins," The Quarterly Journal of Economics, MIT Press, vol. 117(4), pages 1193-1229, November. [Downloadable!] (restricted)
    Other versions:
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