IDEAS home Printed from https://ideas.repec.org/p/dls/wpaper/0199.html
   My bibliography  Save this paper

Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender

Author

Listed:
  • Mariana Viollaz

    (CEDLAS - UNLP)

Abstract

When compliance with labor market regulations is low, the enforcement of the labor law becomes a concept that is closer to the regulatory environment that firms and workers face. Firms are expected to react to variations in the enforcement level, and the response may differ for male and female workers. This paper explores microdata from Argentine household surveys to analyze: (i) how changes in the enforcement of labor regulations affect the level of compliance with the labor law among men and women, and (ii) how changes in the enforcement of the labor law generate adjustments of other labor outcomes, for men and women separately. Using information of the highly decentralized labor inspection system in Argentina, I construct an enforcement measure with variation at the province, sector, and time level (share of inspected firms). To deal with the potential endogeneity of this measure, I instrument using a measure of the arrival cost of labor inspectors to the firms. The main findings reveal different patterns of adjustment for men and women. When the degree of enforcement increases: the compliance with employment and social security regulations increases for men and decreases for women; the share of wage employees increases and the share of self-employed declines for men, with no changes for women; no changes are found in hourly wages and in the provision of non-mandated benefits. These results bring additional evidence about how the regulatory environment can impact on the decisions of firms and workers about participating in the informal sector. More importantly, they stress that both the written labor regulation and the degree of enforcement are essential parts in the provision of social and labor protection.

Suggested Citation

  • Mariana Viollaz, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," CEDLAS, Working Papers 0199, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0199
    as

    Download full text from publisher

    File URL: http://cedlas.econo.unlp.edu.ar/archivos_upload/doc_cedlas199.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Caballero, Ricardo J. & Cowan, Kevin N. & Engel, Eduardo M.R.A. & Micco, Alejandro, 2013. "Effective labor regulation and microeconomic flexibility," Journal of Development Economics, Elsevier, vol. 101(C), pages 92-104.
    2. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
    3. Costas Meghir & Renata Narita & Jean-Marc Robin, 2015. "Wages and Informality in Developing Countries," American Economic Review, American Economic Association, vol. 105(4), pages 1509-1546, April.
    4. Blanchard, Olivier & Wolfers, Justin, 2000. "The Role of Shocks and Institutions in the Rise of European Unemployment: The Aggregate Evidence," Economic Journal, Royal Economic Society, vol. 110(462), pages 1-33, March.
    5. 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.
    6. James Albrecht & Lucas Navarro & Susan Vroman, 2009. "The Effects of Labour Market Policies in an Economy with an Informal Sector," Economic Journal, Royal Economic Society, vol. 119(539), pages 1105-1129, July.
    7. 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.
    8. Amin, Mohammad, 2009. "Labor regulation and employment in India's retail stores," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 47-61, March.
    9. Olivier Blanchard & Pedro Portugal, 1998. "What Hides Behind an Umemployment Rate: Comparing Portuguese and U.S. Unemployment," NBER Working Papers 6636, National Bureau of Economic Research, Inc.
    10. Micco, Alejandro & Pagés, Carmen, 2006. "The Economic Effects of Employment Protection: Evidence from International Industry-Level Data," IZA Discussion Papers 2433, Institute of Labor Economics (IZA).
    11. Rita Almeida & Pedro Carneiro, 2012. "Enforcement of Labor Regulation and Informality," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 64-89, July.
    12. Rita Almeida & Pedro Carneiro, Renata Narita, 2013. "Producing Higher Quality Jobs: Enforcement of Mandated Benefits across Brazilian Cities between 1996-2007," Working Papers, Department of Economics 2013_22, University of São Paulo (FEA-USP).
    13. Haroon Bhorat & Ravi Kanbur & Natasha Mayet, 2012. "Estimating the Causal Effect of Enforcement on Minimum Wage Compliance: The Case of S outh A frica," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 608-623, November.
    14. Rita Almeida & Lucas Ronconi, 2016. "Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 468-489, July.
    15. Claudio Montenegro & Carmen Pagés, 2005. "Who Benefits from Labor Market Regulations? Chile 1960-1998," Central Banking, Analysis, and Economic Policies Book Series, in: Jorge Restrepo & Andrea Tokman R. & Norman Loayza (Series Editor) & Klaus Schmidt-Hebbel (Series Edi (ed.),Labor Markets and Institutions, edition 1, volume 8, chapter 4, pages 077-114, Central Bank of Chile.
    16. Fields,Gary S., 2005. "A guide to multisector labor market models," Social Protection and Labor Policy and Technical Notes 32547, The World Bank.
    17. Michael J. PIORE & Andrew SCHRANK, 2008. "Toward managed flexibility: The revival of labour inspection in the Latin world," International Labour Review, International Labour Organization, vol. 147(1), pages 1-23, March.
    18. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    19. Guillermo Mondino & Silvia Montoya, 2004. "The Effects of Labor Market Regulations on Employment Decisions by Firms. Empirical Evidence for Argentina," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 351-400, National Bureau of Economic Research, Inc.
    20. Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126(C), pages 154-166.
    21. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 119(1), pages 91-134.
    22. repec:hal:spmain:info:hdl:2441/4ra95789n9nrr59b6lmini6tp is not listed on IDEAS
    23. Fields,Gary S., 2005. "A guide to multisector labor market models," Policy Research Working Paper Series 32547, The World Bank.
    24. Carlos A.Arango & Angélica Pachón, 2004. "Minimum Wages in Colombia: Holding the Middle With a Bite on the Poor," Borradores de Economia 280, Banco de la Republica de Colombia.
    25. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 285-317.
    26. Loayza, Norman V., 1996. "The economics of the informal sector: a simple model and some empirical evidence from Latin America," Carnegie-Rochester Conference Series on Public Policy, Elsevier, vol. 45(1), pages 129-162, December.
    27. Aureo de Paula & Jose A. Scheinkman, 2006. "The Informal Sector," Levine's Bibliography 122247000000001030, UCLA Department of Economics.
    28. Lucas Ronconi, 2012. "Globalization, Domestic Institutions, and Enforcement of Labor Law: Evidence from Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 89-105, January.
    29. Adriana D. Kugler, 2004. "The Effect of Job Security Regulations on Labor Market Flexibility. Evidence from the Colombian Labor Market Reform," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 183-228, National Bureau of Economic Research, Inc.
    30. Rita K. Almeida & Z. Bilgen Susanlı, 2012. "Firing Regulations and Firm Size in the Developing World: Evidence from Differential Enforcement," Review of Development Economics, Wiley Blackwell, vol. 16(4), pages 540-558, November.
    31. 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, May.
    32. Costas Meghir & Renata Narita & Jean-Marc Robin, 2015. "Wages and Informality in Developing Countries," Post-Print hal-03587627, HAL.
    33. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, June.
    34. Scarpetta, Stefano & Tressel, Thierry, 2004. "Boosting productivity via innovation and adoption of new technologies : any role for labor market institutions?," Social Protection Discussion Papers and Notes 29144, The World Bank.
    35. Feldmann, Horst, 2009. "The unemployment effects of labor regulation around the world," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 76-90, March.
    36. Addison, John T. & Ozturk, Orgul Demet, 2010. "Minimum Wages, Labor Market Institutions, and Female Employment and Unemployment: A Cross-Country Analysis," IZA Discussion Papers 5162, Institute of Labor Economics (IZA).
    37. 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.
    38. Matthew Amengual, 2014. "Pathways to Enforcement: Labor Inspectors Leveraging Linkages with Society in Argentina," ILR Review, Cornell University, ILR School, vol. 67(1), pages 3-33, January.
    39. Sebastian Galiani & Federico Weinschelbaum, 2012. "Modeling Informality Formally: Households And Firms," Economic Inquiry, Western Economic Association International, vol. 50(3), pages 821-838, July.
    40. Carmen Pagés & Claudio E. Montenegro, 2007. "Job security and the age-composition of employment: evidence from Chile," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 109-139, December.
    41. Toke Aidt & Zafiris Tzannatos, 2002. "Unions and Collective Bargaining : Economic Effects in a Global Environment," World Bank Publications - Books, The World Bank Group, number 15241, December.
    42. Zadia M. Feliciano, 1998. "Does the Minimum Wage Affect Employment in Mexico?," Eastern Economic Journal, Eastern Economic Association, vol. 24(2), pages 165-180, Spring.
    43. Carlos Arango & Angélica Pachón, 2004. "Minimum Wages in Colombia: Holding the Middle with a Bite," Borradores de Economia 3224, Banco de la Republica.
    44. Almeida, Rita K. & Aterido, Reyes, 2011. "On-the-job training and rigidity of employment protection in the developing world: Evidence from differential enforcement," Labour Economics, Elsevier, vol. 18(S1), pages 71-82.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Mariana Viollaz, 2019. "Multiple Violations of Labor Market Regulations: Patterns in the Peruvian Labor Market and the Impact of Enforcement," CEDLAS, Working Papers 0244, CEDLAS, Universidad Nacional de La Plata.
    2. Diaz, Juan Jose & Chacaltana, Juan & Rigolini, Jamele & Ruiz, Claudia, 2018. "Pathways to Formalization: Going beyond the Formality Dichotomy," IZA Discussion Papers 11750, Institute of Labor Economics (IZA).
    3. Mariana Viollaz, 2016. "Are Labor Inspections Protecting Workers’ Rights? Adding the Evidence from Size-based Labor Regulations and Fines in Peru," CEDLAS, Working Papers 0205, CEDLAS, Universidad Nacional de La Plata.
    4. Mariana VIOLLAZ, 2018. "Are labour inspections effective when labour regulations vary according to the size of the firm? Evidence from Peru," International Labour Review, International Labour Organization, vol. 157(2), pages 213-242, June.
    5. Mario Bossler & Ursula Jaenichen & Simeon Schächtele, 2022. "How effective are enforcement measures for compliance with the minimum wage? Evidence from Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 43(2), pages 943-971, May.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Viollaz, Mariana, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," MPRA Paper 72000, University Library of Munich, Germany.
    2. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    3. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
    4. Mariana Viollaz, 2016. "Are Labor Inspections Protecting Workers’ Rights? Adding the Evidence from Size-based Labor Regulations and Fines in Peru," CEDLAS, Working Papers 0205, CEDLAS, Universidad Nacional de La Plata.
    5. Almeida, Rita & Carneiro, Pedro, 2008. "Mandated benefits, employment, and inequality in a dual economy," Social Protection Discussion Papers and Notes 45051, The World Bank.
    6. Betcherman, Gordon, 2014. "Labor market regulations : what do we know about their impacts in developing countries ?," Policy Research Working Paper Series 6819, The World Bank.
    7. Ravi KANBUR & Lucas RONCONI, 2018. "Enforcement matters: The effective regulation of labour," International Labour Review, International Labour Organization, vol. 157(3), pages 331-356, September.
    8. Mariana VIOLLAZ, 2018. "Are labour inspections effective when labour regulations vary according to the size of the firm? Evidence from Peru," International Labour Review, International Labour Organization, vol. 157(2), pages 213-242, June.
    9. Kaplan, David S., 2009. "Job creation and labor reform in Latin America," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 91-105, March.
    10. Parsons, Donald O., 2011. "Mandated Severance Pay and Firing Cost Distortions: A Critical Review of the Evidence," IZA Discussion Papers 5776, Institute of Labor Economics (IZA).
    11. Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126(C), pages 154-166.
    12. Ahsan, Ahmad & Pagés, Carmen, 2009. "Are all labor regulations equal? Evidence from Indian manufacturing," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 62-75, March.
    13. Richard B. Freeman, 2009. "Labor Regulations, Unions, and Social Protection in Developing Countries: Market distortions or Efficient Institutions?," NBER Working Papers 14789, National Bureau of Economic Research, Inc.
    14. Rita Almeida & Lucas Ronconi, 2016. "Labor Inspections in the Developing World: Stylized Facts from the Enterprise Survey," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 55(3), pages 468-489, July.
    15. Pierre, Gaëlle & Scarpetta, Stefano, 2004. "Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them?," IZA Discussion Papers 1424, Institute of Labor Economics (IZA).
    16. Giovanna Vallanti & Giuseppina Gianfreda, 2021. "Informality, regulation and productivity: do small firms escape EPL through shadow employment?," Small Business Economics, Springer, vol. 57(3), pages 1383-1412, October.
    17. Romain Duval & Prakash Loungani, 2021. "Designing Labor Market Institutions in Emerging Market and Developing Economies: A Review of Evidence and IMF Policy Advice," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(1), pages 31-83, March.
    18. Anastasia Koutsomanoli-Filippaki & Emmanuel Mamatzakis, 2013. "How labour market regulation shapes bank performance in EU-15 countries?," Working Papers 162, Bank of Greece.
    19. Reyes Aterido & Mary Hallward-Driemeier & Carmen Pagés, 2011. "Big Constraints to Small Firms' Growth? Business Environment and Employment Growth across Firms," Economic Development and Cultural Change, University of Chicago Press, vol. 59(3), pages 609-647.
    20. Emmanuel Mamatzakis & Panagiotis Pegkas & Christos Staikouras, 2023. "Labour market regulations and efficiency in tourism industry," Tourism Economics, , vol. 29(4), pages 1032-1054, June.

    More about this item

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J63 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Turnover; Vacancies; Layoffs
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:dls:wpaper:0199. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Ana Pacheco (email available below). General contact details of provider: https://edirc.repec.org/data/funlpar.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.