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The Impact of Labor Market Regulations

  • Squire, Lyn
  • Suthiwart-Narueput, Sethaput

This article investigates the impact of labor market regulations in a setting with incomplete compliance. It takes as its starting point the limited evidence regarding the distortionary costs of labor market regulations and argues that there may exist natural limits to the efficiency losses engendered by such regulations. The article reviews some stylized facts regarding labor market behavior, presents an analytical model that may explain such behavior, and provides a checklist for assessing the distortionary impact of regulations such as minimum wages. Copyright 1997 by Oxford University Press.

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Article provided by World Bank Group in its journal World Bank Economic Review.

Volume (Year): 11 (1997)
Issue (Month): 1 (January)
Pages: 119-43

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Handle: RePEc:oup:wbecrv:v:11:y:1997:i:1:p:119-43
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  1. Gelb, A & Knight, John B & Sabot, R H, 1991. "Public Sector Employment, Rent Seeking and Economic Growth," Economic Journal, Royal Economic Society, vol. 101(408), pages 1186-99, September.
  2. Alida Castillo Freeman & Richard B. Freeman, 1991. "Minimum Wages in Puerto Rico: Textbook Case of a Wage Floor?," NBER Working Papers 3759, National Bureau of Economic Research, Inc.
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