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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. Journal of Comparative Economics 37 (1) (2009) 91-105.

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  • Kaplan, David S., 2009. "Job creation and labor reform in Latin America," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 91-105, March.
  • Handle: RePEc:eee:jcecon:v:37:y:2009:i:1:p:91-105
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    2. Umidjon Abdullaev & Marcello Estevao, 2013. "Growth and Employment in the Dominican Republic; Options for a Job-Rich Growth," IMF Working Papers 13/40, International Monetary Fund.
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    13. 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.
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