IDEAS home Printed from https://ideas.repec.org/a/bla/intlab/v157y2018i3p331-356.html
   My bibliography  Save this article

Enforcement matters: The effective regulation of labour

Author

Listed:
  • Ravi KANBUR
  • Lucas RONCONI

Abstract

The distinction between de jure and de facto regulation is well understood in theory, but has rarely been applied to cross‐country empirical work on the impact of labour regulation on labour market outcomes for lack of data. Policy debate has been based on measures of stringency of law, suggesting a negative correlation between labour regulation and labour market outcomes. This article provides new cross‐country measures of labour law enforcement and evidence of a negative correlation between stringency and intensity of enforcement. Previous results concerning the consequences of labour regulation and the legal origins theory no longer hold when a measure of effective labour regulation is used.

Suggested Citation

  • Ravi KANBUR & Lucas RONCONI, 2018. "Enforcement matters: The effective regulation of labour," International Labour Review, International Labour Organization, vol. 157(3), pages 331-356, September.
  • Handle: RePEc:bla:intlab:v:157:y:2018:i:3:p:331-356
    DOI: 10.1111/ilr.12112
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/ilr.12112
    Download Restriction: no

    File URL: https://libkey.io/10.1111/ilr.12112?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Haroon BHORAT & Ravi KANBUR & Natasha MAYET, 2012. "Minimum wage violation in South Africa," International Labour Review, International Labour Organization, vol. 151(3), pages 277-287, September.
    2. Andrei Shleifer & Florencio Lopez-de-Silanes & Rafael La Porta, 2008. "The Economic Consequences of Legal Origins," Journal of Economic Literature, American Economic Association, vol. 46(2), pages 285-332, June.
    3. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
    4. James J. Heckman & Carmen Pagés, 2004. "Law and Employment: Lessons from Latin America and the Caribbean," NBER Books, National Bureau of Economic Research, Inc, number heck04-1, June.
    5. Gary S. Becker, 1974. "Crime and Punishment: An Economic Approach," NBER Chapters, in: Essays in the Economics of Crime and Punishment, pages 1-54, National Bureau of Economic Research, Inc.
    6. Editors The, 2008. "From the Editors," Basic Income Studies, De Gruyter, vol. 3(1), pages 1-1, July.
    7. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
    8. Juan C. Botero & Simeon Djankov & Rafael La Porta & Florencio Lopez-de-Silanes & Andrei Shleifer, 2004. "The Regulation of Labor," The Quarterly Journal of Economics, Oxford University Press, vol. 119(4), pages 1339-1382.
    9. Ravi KANBUR & Lucas RONCONI & Leigh WEDENOJA, 2013. "Labour law violations in Chile," International Labour Review, International Labour Organization, vol. 152(3-4), pages 431-444, December.
    10. Friedrich Schneider & Andreas Buehn & Claudio E. Montenegro, 2011. "Shadow Economies All Over the World: New Estimates for 162 Countries from 1999 to 2007," Chapters, in: Friedrich Schneider (ed.), Handbook on the Shadow Economy, chapter 1, Edward Elgar Publishing.
    11. Rita Almeida & Pedro Carneiro, 2012. "Enforcement of Labor Regulation and Informality," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 64-89, July.
    12. Ashenfelter, Orley & Smith, Robert S, 1979. "Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 333-350, April.
    13. Friedrich Schneider & Andreas Buehn & Claudio Montenegro, 2010. "New Estimates for the Shadow Economies all over the World," International Economic Journal, Taylor & Francis Journals, vol. 24(4), pages 443-461.
    14. Roberto PIRES, 2008. "Promoting sustainable compliance: Styles of labour inspection and compliance outcomes in Brazil," International Labour Review, International Labour Organization, vol. 147(2-3), pages 199-229, June.
    15. Ronconi, Lucas, 2015. "Enforcement and the Effective Regulation of Labor," IDB Publications (Working Papers) 7296, Inter-American Development Bank.
    16. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
    17. Amengual, Matthew, 2010. "Complementary Labor Regulation: The Uncoordinated Combination of State and Private Regulators in the Dominican Republic," World Development, Elsevier, vol. 38(3), pages 405-414, March.
    18. Heckman, James J. & Pages, Carmen (ed.), 2004. "Law and Employment," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226322827, July.
    19. Feldmann, Horst, 2009. "The unemployment effects of labor regulation around the world," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 76-90, March.
    20. Barro, Robert J. & Lee, Jong Wha, 2013. "A new data set of educational attainment in the world, 1950–2010," Journal of Development Economics, Elsevier, vol. 104(C), pages 184-198.
    21. Ocampo, Jose Antonio & Ros, Jaime (ed.), 2011. "The Oxford Handbook of Latin American Economics," OUP Catalogue, Oxford University Press, number 9780199571048.
    22. Lucas Ronconi, 2012. "Globalization, Domestic Institutions, and Enforcement of Labor Law: Evidence from Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 89-105, January.
    23. 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.
    24. Galli, Rossana & Kucera, David, 2004. "Labor Standards and Informal Employment in Latin America," World Development, Elsevier, vol. 32(5), pages 809-828, May.
    25. Rita Almeida & Lucas Ronconi, 2016. "Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 468-489, July.
    26. Editors The, 2008. "From the Editors," Basic Income Studies, De Gruyter, vol. 2(2), pages 1-3, January.
    27. Michael J. PIORE & Andrew SCHRANK, 2008. "Toward managed flexibility: The revival of labour inspection in the Latin world," International Labour Review, International Labour Organization, vol. 147(1), pages 1-23, March.
    28. Andrés Ham, 2015. "Minimum wage violations in Honduras," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    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


    Cited by:

    1. Kashif Mansoor & Donal O'Neill, 2020. "Minimum Wage Compliance and Household Welfare: An analysis of over 1500 Minimum Wages," Economics Department Working Paper Series n301-20.pdf, Department of Economics, National University of Ireland - Maynooth.
    2. Marek Gora & Piotr Lewandowski & Maciej Lis, 2017. "Temporary employment boom in Poland – a job quality vs. quantity trade-off?," IBS Working Papers 04/2017, Instytut Badan Strukturalnych.
    3. Aditya BHATTACHARJEA, 2021. "Labour market flexibility in Indian manufacturing: A critical survey of the literature," International Labour Review, International Labour Organization, vol. 160(2), pages 197-217, June.
    4. Lucas Ronconi & Ravi Kanbur & Santiago López-Cariboni, 2019. "Who demands labour (de)regulation in the developing world?: Insider-outsider theory revisited," WIDER Working Paper Series wp-2019-90, World Institute for Development Economic Research (UNU-WIDER).
    5. Rodrigo Ceni & Gabriel Merlo, 2021. "Twenty years of job flows in an emerging country," Documentos de Trabajo (working papers) 21-10, Instituto de Economia - IECON.
    6. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix & Amy Thornton, 2021. "Measuring Multi‐Dimensional Labour Law Violation with an Application to South Africa," British Journal of Industrial Relations, London School of Economics, vol. 59(3), pages 928-961, September.
    7. Amrit Amirapu & Michael Gechter, 2020. "Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 34-48, March.
    8. Rita Almeida & Lucas Ronconi, 2016. "Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 468-489, July.
    9. Soundararajan, Vidhya, 2019. "Heterogeneous effects of imperfectly enforced minimum wages in low-wage labor markets," Journal of Development Economics, Elsevier, vol. 140(C), pages 355-374.
    10. Lucas Ronconi, 2019. "Enforcement of labor regulations in developing countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 457-457, March.
    11. Badaoui, Eliane & Walsh, Frank, 2022. "Productivity, non-compliance and the minimum wage," Journal of Development Economics, Elsevier, vol. 155(C).
    12. Ham, Andrés, 2018. "The Consequences of Legal Minimum Wages in Honduras," World Development, Elsevier, vol. 102(C), pages 135-157.
    13. Yolova, Galina & Andreeva, Andriyana, 2019. "Принципите На Свобода На Труда И Свобода На Договаряне [The principles of freedom of labour and freedom to negotiate in context of flexible forms of employment]," MPRA Paper 101066, University Library of Munich, Germany.
    14. Servaas Storm, 2019. "Labor Laws and Manufacturing Performance in India: How Priors Trump Evidence and Progress Gets Stalled," Working Papers Series 90, Institute for New Economic Thinking.
    15. Lucas Ronconi & Mercedes Sidders & Benjamin Stanwix, 2016. "The Paradox of Effective Labor Regulation," Working Papers 201605, University of Cape Town, Development Policy Research Unit.
    16. Haroo Bhorat & Ravi Kanbur & Benjamin Stanwix, 2019. "Compliance with labor laws in developing countries," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-80, June.
    17. Salvador Valdés & Samuel Leyton, 2019. "Social insurance contributions: frequency vs. Earnings," Documentos de Trabajo 528, Instituto de Economia. Pontificia Universidad Católica de Chile..
    18. Mansoor, Kashif & O'Neill, Donal, 2021. "Minimum wage compliance and household welfare: An analysis of over 1500 minimum wages in India," World Development, Elsevier, vol. 147(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ronconi, Lucas, 2015. "Enforcement and the Effective Regulation of Labor," IDB Publications (Working Papers) 7296, Inter-American Development Bank.
    2. Lucas Ronconi, 2015. "Enforcement and the Effective Regulation of Labor," IDB Publications (Working Papers) 91777, Inter-American Development Bank.
    3. Mariana Viollaz, 2018. "Enforcement of labor market regulations: heterogeneous compliance and adjustment across gender," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    4. Lucas Ronconi & Mercedes Sidders & Benjamin Stanwix, 2016. "The Paradox of Effective Labor Regulation," Working Papers 201605, University of Cape Town, Development Policy Research Unit.
    5. Viollaz, Mariana, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," MPRA Paper 72000, University Library of Munich, Germany.
    6. Ronconi, Lucas & Zarazaga S.J., Rodrigo, 2015. "Labor Exclusion and the Erosion of Citizenship Responsibilities," World Development, Elsevier, vol. 74(C), pages 453-461.
    7. Sabina Dewan & Lucas Ronconi, 2014. "U.S. Free Trade Agreements and Enforcement of Labor Law in Latin America," IDB Publications (Working Papers) 87253, Inter-American Development Bank.
    8. Rita Almeida & Lucas Ronconi, 2016. "Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 468-489, July.
    9. Kaplan, David S., 2009. "Job creation and labor reform in Latin America," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 91-105, March.
    10. Stefan Pahl & Marcel P. Timmer, 2020. "Do Global Value Chains Enhance Economic Upgrading? A Long View," Journal of Development Studies, Taylor & Francis Journals, vol. 56(9), pages 1683-1705, July.
    11. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
    12. Gindling,T. H. & Mossaad,Nadwa & Newhouse,David Locke, 2016. "Earnings premiums and penalties for self-employment and informal employees around the world," Policy Research Working Paper Series 7530, The World Bank.
    13. Mariana VIOLLAZ, 2018. "Are labour inspections effective when labour regulations vary according to the size of the firm? Evidence from Peru," International Labour Review, International Labour Organization, vol. 157(2), pages 213-242, June.
    14. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.
    15. Alexander Muravyev, 2014. "Employment protection legislation in transition and emerging markets," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-63, September.
    16. Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126(C), pages 154-166.
    17. Alan Finkelstein Shapiro, 2015. "Institutions, Informal Labor Markets, and Business Cycle Volatility," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2015), pages 77-112, October.
    18. Ulyssea, Gabriel & Ponczek, Vladimir, 2018. "Enforcement of Labor Regulation and the Labor Market Effects of Trade: Evidence from Brazil," IZA Discussion Papers 11783, Institute of Labor Economics (IZA).
    19. Carmen Pagés-Serra & Alejandro Micco, 2008. "Efectos económicos de la protección del empleo: Elementos de juicio a partir de datos internacionales a nivel de actividad económica," Research Department Publications 4497, Inter-American Development Bank, Research Department.
    20. Haroon Bhorat & Ravi Kanbur & Benjamin Stanwix & Amy Thornton, 2021. "Measuring Multi‐Dimensional Labour Law Violation with an Application to South Africa," British Journal of Industrial Relations, London School of Economics, vol. 59(3), pages 928-961, September.

    More about this item

    JEL classification:

    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:intlab:v:157:y:2018:i:3:p:331-356. 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: . General contact details of provider: https://edirc.repec.org/data/ilounch.html .

    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 CitEc recognized a bibliographic reference but did not link an item in RePEc 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 RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/ilounch.html .

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.