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

  • Beatriz Muriel

    (Institute for Advanced Development Studies (INESAD))

  • Gustavo Machicado

    (Institute for Advanced Development Studies (INESAD))

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
Date of revision:
Handle: RePEc:dls:wpaper:0157
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Web page: http://cedlas.econo.unlp.edu.ar/
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  1. Juan Botero & Simeon Djankov & Rafael LaPorta & Florencio López-de-Silanes & Andrei Shleifer, . "The Regulation of Labor," Working Paper 19483, Harvard University OpenScholar.
  2. Badi Baltagi & Seuck Song, 2006. "Unbalanced panel data: A survey," Statistical Papers, Springer, vol. 47(4), pages 493-523, October.
  3. 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.
  4. 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.
  5. 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.
  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. 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, October.
  8. Jonathan Gruber, 1995. "The Incidence of Payroll Taxation: Evidence from Chile," NBER Working Papers 5053, National Bureau of Economic Research, Inc.
  9. Beatriz Muriel & Lusi 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.
  10. John Haltiwanger & Stefano Scarpetta & Helena Schweiger, 2008. "Assessing Job Flows Across Countries: The Role of Industry, Firm Size and Regulations," NBER Working Papers 13920, National Bureau of Economic Research, Inc.
  11. 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 339-49, June.
  12. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Do Employment Protections Reduce Productivity? Evidence from U.S. States," Harvard Business School Working Papers 07-048, Harvard Business School.
  13. 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.
  14. Carmen Pagés-Serra & Alejandro Micco, 2004. "Employment Protection and Gross Job Flows: A Differences-in-Differences Approach," IDB Publications (Working Papers) 4127, Inter-American Development Bank.
  15. 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 882-88, September.
  16. 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).
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