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Labor market regulation and the legal system

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  • Hefeker, Carsten
  • Neugart, Michael

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.

Suggested Citation

  • Hefeker, Carsten & Neugart, Michael, 2010. "Labor market regulation and the legal system," International Review of Law and Economics, Elsevier, vol. 30(3), pages 218-225, September.
  • Handle: RePEc:eee:irlaec:v:30:y:2010:i:3:p:218-225
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    Cited by:

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    2. Christian Bjørnskov & Niklas Potrafke, 2012. "Political Ideology and Economic Freedom Across Canadian Provinces," Eastern Economic Journal, Palgrave Macmillan;Eastern Economic Association, vol. 38(2), pages 143-166.
    3. repec:dau:papers:123456789/6913 is not listed on IDEAS
    4. Belkhir, Mohamed & Ben-Nasr, Hamdi & Boubaker, Sabri, 2016. "Labor protection and corporate Debt maturity: International evidence," International Review of Financial Analysis, Elsevier, vol. 45(C), pages 134-149.

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    More about this item

    Keywords

    Labor market regulation Labor courts Uncertainty Unemployment;

    JEL classification:

    • D78 - Microeconomics - - Analysis of Collective Decision-Making - - - Positive Analysis of Policy Formulation and Implementation
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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