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Employment and Labor Regulation: Evidence from Manufacturing Firms in Bolivia, 1988-2007

Author Info

Listed author(s):
  • Beatriz Muriel

    (Institute for Advanced Development Studies (INESAD))

  • Gustavo Machicado

    (Institute for Advanced Development Studies (INESAD))

Abstract

This paper analyzes the effects of labor regulation on employment for Bolivian registered manufacturing firms during 1988 to 2007. By estimating job flows we find that firms with high temporary worker rates (as a proxy of lower labor regulation costs) are those with both higher job reallocation rates and higher net employment growth, and only they contributed to employment growth during the country economic downturn, 1998-1999. In addition, by estimating demand functions we find that labor regulation changes (measured through the compulsory basic salary and the major labor costs derived from the new pension law) entailed costs in terms of permanent employment losses.

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File URL: http://cedlas.econo.unlp.edu.ar/archivos_upload/doc_cedlas157.pdf
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Paper provided by CEDLAS, Universidad Nacional de La Plata in its series CEDLAS, Working Papers with number 0157.

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Length: 34 pages
Date of creation: Apr 2014
Handle: RePEc:dls:wpaper:0157
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Web page: http://cedlas.econo.unlp.edu.ar/

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Find related papers by JEL classification:
  • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
  • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
  • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
  • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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  1. Beatriz Muriel & Luis Carlos Jemio, 2010. "Mercado laboral y reformas en Bolivia," Capítulos de Libros PUCP / Chapters of PUCP books,in: José Rodríguez & Albert Berry (ed.), Desafíos laborales en América Latina después de dos décadas de reformas estructurales. Bolivia, Paraguay y Perú 1997-2008, edition 1, chapter 5, pages 273-356 Departamento de Economía - Pontificia Universidad Católica del Perú.
  2. Kesselman, Jonathan R & Williamson, Samuel H & Berndt, Ernst R, 1977. "Tax Credits for Employment Rather Than Investment," American Economic Review, American Economic Association, vol. 67(3), pages 339-349, June.
  3. Haltiwanger, John C. & Scarpetta, Stefano & Schweiger, Helena, 2006. "Assessing Job Flows across Countries: The Role of Industry, Firm Size and Regulations," IZA Discussion Papers 2450, Institute for the Study of Labor (IZA).
  4. Alejandro Micco & Carmen Pagés-Serra, 2004. "Employment Protection and Gross Job Flows: A Differences-in-Differences Approach," Research Department Publications 4365, Inter-American Development Bank, Research Department.
  5. 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.
  6. Beatriz Muriel, 2011. "Rethinking Earnings Determinants in the Urban Areas of Bolivia," Development Research Working Paper Series 06/2011, Institute for Advanced Development Studies.
  7. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
  8. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," NBER Working Papers 12860, National Bureau of Economic Research, Inc.
  9. 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.
  10. Biorn, Erik, 2004. "Regression systems for unbalanced panel data: a stepwise maximum likelihood procedure," Journal of Econometrics, Elsevier, vol. 122(2), pages 281-291, October.
  11. Barja, Gover, 1999. "Las reformas estructurales bolivianas y su impacto sobre inversiones
    [Bolivian structural reforms and their impact on investment]    ," MPRA Paper 23479, University Library of Munich, Germany.
  12. Ricardo Paes de Barros & Carlos Henrique Corseuil & Gustavo Gonzaga, 1999. "Labor market regulations and the demand for labor in Brazil," Textos para discussão 398, Department of Economics PUC-Rio (Brazil).
  13. Badi Baltagi & Seuck Song, 2006. "Unbalanced panel data: A survey," Statistical Papers, Springer, vol. 47(4), pages 493-523, October.
  14. Blackorby, Charles & Russell, R Robert, 1989. "Will the Real Elasticity of Substitution Please Stand Up? (A Comparison of the Allen/Uzawa and Morishima Elasticities)," American Economic Review, American Economic Association, vol. 79(4), pages 882-888, September.
  15. 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.
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