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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.

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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4708.

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Date of creation: 01 Sep 2008
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Handle: RePEc:wbk:wbrwps:4708

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Keywords: Labor Markets; Labor Policies; Labor Management and Relations; Labor Standards; Work&Working Conditions;

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References

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Citations

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Cited by:
  1. 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.
  2. Gallagher, Mary & Giles, John T. & Park, Albert & Wang, Meiyan, 2013. "China's 2008 Labor Contract Law: Implementation and Implications for China's Workers," IZA Discussion Papers 7555, Institute for the Study of Labor (IZA).
  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. Kuddo, Arvo, 2009. "Labor laws in Eastern European and Central Asian countries : minimum norms and practices," Social Protection Discussion Papers 51698, The World Bank.
  5. repec:idb:brikps:67058 is not listed on IDEAS
  6. World Bank, 2010. "Cape Verde : Initial Assessment of the Formal Labor Market," World Bank Other Operational Studies 2986, The World Bank.
  7. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
  8. Umidjon Abdullaev & Marcello Estevao, 2013. "Growth and Employment in the Dominican Republic," IMF Working Papers 13/40, International Monetary Fund.
  9. 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.
  10. 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).
  11. International Finance Corporation & World Bank, 2008. "Doing Business 2009 : Comparing Regulation in 181 Economies," World Bank Publications, The World Bank, number 6313.

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