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Enforcement and the Effective Regulation of Labor

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  • Lucas Ronconi

Abstract

This paper provides new measures of labor law enforcement across the world. The constructed dataset shows that countries with more stringent de jure regulation tend to enforce less. While civil law countries tend to have more stringent de jure labor codes as predicted by legal origin theory, they enforce them less, suggesting a more nuanced version of legal origin theory. The paper further hypothesizes that in territories where Europeans pursued an extractive strategy, they created economies characterized by monopolies and exploitation of workers, which ultimately led to stringent labor laws in an attempt to buy social peace. Those laws, however, applied de facto only in firms and sectors with high rents and workers capable of mobilizing. Finally, it is shown that territories with higher European settler mortality presently have more stringent de jure labor regulations, lower overall labor inspection, and larger differences in effective regulation of bigger firms.

Suggested Citation

  • Lucas Ronconi, 2015. "Enforcement and the Effective Regulation of Labor," IDB Publications (Working Papers) 7296, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:7296
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    File URL: http://publications.iadb.org/bitstream/handle/11319/7296/Enforcement-and-the-Effective-Regulation-of-Labor.pdf?sequence=1
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    References listed on IDEAS

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    5. David Y. Albouy, 2012. "The Colonial Origins of Comparative Development: An Empirical Investigation: Comment," American Economic Review, American Economic Association, vol. 102(6), pages 3059-3076, October.
    6. 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.
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    Cited by:

    1. Lucas Ronconi & Mercedes Sidders & Benjamin Stanwix, 2016. "The Paradox of Effective Labor Regulation," Working Papers 201605, University of Cape Town, Development Policy Research Unit.

    More about this item

    Keywords

    Child labor; Wages; Labor; Enforcement; Effective regulation; Legal origin; Colonial origin *; IDB-WP-622;

    JEL classification:

    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies

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