Advanced Search
MyIDEAS: Login

Job creation and labor reform in Latin America

Contents:

Author Info

  • 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.

Download Info

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
File URL: http://www-wds.worldbank.org/servlet/WDSContentServer/WDSP/IB/2008/09/03/000158349_20080903104622/Rendered/PDF/WPS4708.pdf
Download Restriction: no

Bibliographic Info

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

as in new window
Length:
Date of creation: 01 Sep 2008
Date of revision:
Handle: RePEc:wbk:wbrwps:4708

Contact details of provider:
Postal: 1818 H Street, N.W., Washington, DC 20433
Phone: (202) 477-1234
Email:
Web page: http://www.worldbank.org/
More information through EDIRC

Related research

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

Other versions of this item:

This paper has been announced in the following NEP Reports:

References

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
as in new window
  1. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
  2. Haltiwanger, John & Scarpetta, Stefano & Schweiger, Helena, 2006. "Assessing job flows across countries : the role of industry, firm size, and regulations," Policy Research Working Paper Series 4070, The World Bank.
  3. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2010. "Factor Adjustments after Deregulation: Panel Evidence from Colombian Plants," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 378-391, May.
  4. James Heckman & Carmen Pages, 2003. "Law and Employment: Lessons from Latin America and the Caribbean," NBER Working Papers 10129, National Bureau of Economic Research, Inc.
  5. James J. Heckman & Carmen Pages, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," NBER Working Papers 7773, National Bureau of Economic Research, Inc.
  6. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," IDB Publications 43058, Inter-American Development Bank.
  7. Juan Botero & Simeon Djankov & Rafael LaPorta & Florencio López-de-Silanes & Andrei Shleifer, . "The Regulation of Labor," Working Paper 19483, Harvard University OpenScholar.
  8. Pedro Portugal & Olivier Blanchard, 2001. "What Hides Behind an Unemployment Rate: Comparing Portuguese and U.S. Labor Markets," American Economic Review, American Economic Association, vol. 91(1), pages 187-207, March.
  9. Daron Acemoglu & Robert Shimer, 1999. "Productivity Gains from Unemployment Insurance," NBER Working Papers 7352, National Bureau of Economic Research, Inc.
  10. repec:dgr:uvatin:2004114 is not listed on IDEAS
  11. Timothy Besley & Robin Burgess, 2002. "Can labour regulation hinder economic performance? Evidence from India," LSE Research Online Documents on Economics 3779, London School of Economics and Political Science, LSE Library.
  12. Schneider, Friedrich G., 2007. "Shadow Economies and Corruption All Over the World: New Estimates for 145 Countries," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, vol. 1(9), pages 1-66.
  13. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, 06.
  14. Adriana Kugler, 2004. "The Effect of Job Security Regulations on Labor Market Flexibility: Evidence from the Colombian Labor Market Reform," NBER Working Papers 10215, National Bureau of Economic Research, Inc.
  15. Ricardo J. Caballero & Kevin N. Cowan & Eduardo M.R.A. Engel & Alejandro Micco, 2004. "Effective Labor Regulation and Microeconomic Flexibility," Cowles Foundation Discussion Papers 1480, Cowles Foundation for Research in Economics, Yale University, revised Jun 2010.
  16. Carmen Pagés-Serra & Alejandro Micco, 2007. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," IDB Publications 4120, Inter-American Development Bank.
  17. Hamermesh, Daniel S. & Hassink, Wolter H.J. & Ours, Jan C. van, 1994. "Job turnover and labor turnover : a taxonomy of employment dynamics," Serie Research Memoranda 0050, VU University Amsterdam, Faculty of Economics, Business Administration and Econometrics.
  18. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
  19. Gustavo Gonzaga, 2003. "Labor Turnover and Labor Legislation in Brazil," JOURNAL OF LACEA ECONOMIA, LACEA - LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION.
  20. Pierre, Gaëlle & Scarpetta, Stefano, 2004. "Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?," IZA Discussion Papers 1424, Institute for the Study of Labor (IZA).
  21. Louis S. Jacobson & Robert J. LaLonde & Daniel G. Sullivan, 1993. "Long-term earnings losses of high-seniority displaced workers," Economic Perspectives, Federal Reserve Bank of Chicago, issue Nov, pages 2-20.
  22. Eric J. Bartelsman & John Haltiwanger & Stefano Scarpetta, 2004. "Microeconomic Evidence of Creative Destruction in Industrial and Developing Countries," Tinbergen Institute Discussion Papers 04-114/3, Tinbergen Institute.
  23. Foster, Lucia & Haltiwanger, John C. & Syverson, Chad, 2005. "Reallocation, Firm Turnover, and Efficiency: Selection on Productivity or Profitability?," IZA Discussion Papers 1705, Institute for the Study of Labor (IZA).
  24. Ahsan, Ahmad & Pagés, Carmen, 2008. "Are All Labor Regulations Equal? Evidence from Indian Manufacturing," IZA Discussion Papers 3394, Institute for the Study of Labor (IZA).
  25. Marianne Bertrand & Esther Duflo & Sendhil Mullainathan, 2002. "How Much Should We Trust Differences-in-Differences Estimates?," NBER Working Papers 8841, National Bureau of Economic Research, Inc.
  26. Bosch, Mariano & Goni, Edwin & Maloney, William F., 2007. "The Determinants of Rising Informality in Brazil: Evidence from Gross Worker Flows," IZA Discussion Papers 2970, Institute for the Study of Labor (IZA).
  27. Steve J. Davis & John Haltiwanger, 1991. "Gross job creation, gross job destruction and employment reallocation," Working Paper Series, Macroeconomic Issues 91-5, Federal Reserve Bank of Chicago.
  28. Steven J. Davis & John Haltiwanger, 1990. "Gross Job Creation and Destruction: Microeconomic Evidence and Macroeconomic Implications," NBER Chapters, in: NBER Macroeconomics Annual 1990, Volume 5, pages 123-186 National Bureau of Economic Research, Inc.
  29. Jacobson, Louis S & LaLonde, Robert J & Sullivan, Daniel G, 1993. "Earnings Losses of Displaced Workers," American Economic Review, American Economic Association, vol. 83(4), pages 685-709, September.
  30. James J. Heckman & Carmen Pagés, 2004. "Introduction to "Law and Employment: Lessons from Latin American and the Caribbean"," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 1-108 National Bureau of Economic Research, Inc.
  31. Carmen Pagés-Serra & Alejandro Micco, 2008. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," Research Department Publications 4496, Inter-American Development Bank, Research Department.
  32. Amin, Mohammad, 2008. "Labor regulation and employment in India's retail stores," Social Protection Discussion Papers 44492, The World Bank.
  33. Jaime Saavedra & Mhmo Torero, 2004. "Labor Market Reforms and Their Impact over Formal Labor Demand and Job Market Turnover. The Case of Peru," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 131-182 National Bureau of Economic Research, Inc.
  34. Lucia Foster & John Haltiwanger & C. J. Krizan, 2006. "Market Selection, Reallocation, and Restructuring in the U.S. Retail Trade Sector in the 1990s," The Review of Economics and Statistics, MIT Press, vol. 88(4), pages 748-758, November.
Full references (including those not matched with items on IDEAS)

Citations

Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
as in new window

Cited by:
  1. repec:idb:brikps:67058 is not listed on IDEAS
  2. International Finance Corporation & World Bank, 2008. "Doing Business 2009 : Comparing Regulation in 181 Economies," World Bank Publications, The World Bank, number 6313, October.
  3. 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.
  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. Djankov, Simeon & Ramalho, Rita, 2008. "Employment Laws in Developing Countries," CEPR Discussion Papers 7097, C.E.P.R. Discussion Papers.
  6. World Bank, 2010. "Cape Verde : Initial Assessment of the Formal Labor Market," World Bank Other Operational Studies 2986, The World Bank.
  7. 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.
  8. 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).
  9. Kuddo, Arvo, 2009. "Labor laws in Eastern European and Central Asian countries : minimum norms and practices," Social Protection Discussion Papers 51698, The World Bank.
  10. 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).
  11. Umidjon Abdullaev & Marcello Estevao, 2013. "Growth and Employment in the Dominican Republic," IMF Working Papers 13/40, International Monetary Fund.

Lists

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

Statistics

Access and download statistics

Corrections

When requesting a correction, please mention this item's handle: RePEc:wbk:wbrwps:4708. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Roula I. Yazigi).

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.