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The Cost of Job Security Regulation: Evidence from Latin American Labor Markets

  • Carmen Pagés-Serra


  • James J. Heckman

This paper documents the high level of job security protection in Latin American labor markets and analyzes its impacts on employment. The authors show that job security policies have a substantial impact on the level and the distribution of employment in Latin America. These policies reduce employment and promote inequality. The institutional organization of the labor market affects both employment and inequality.

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Paper provided by Inter-American Development Bank, Research Department in its series Research Department Publications with number 4227.

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Date of creation: Aug 2000
Date of revision:
Handle: RePEc:idb:wpaper:4227
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  1. Ricardo Paes de Barros & Carlos Henrique Corseuil, 2001. "The Impact of Regulations on Brazilian Labor Market Performance," Research Department Publications 3124, Inter-American Development Bank, Research Department.
  2. Stephen Nickell, 1997. "Unemployment and Labor Market Rigidities: Europe versus North America," Journal of Economic Perspectives, American Economic Association, vol. 11(3), pages 55-74, Summer.
  3. Victor Aguirregabiria & Cesar Alonso-Borrego, 2014. "Labor Contracts And Flexibility: Evidence From A Labor Market Reform In Spain," Economic Inquiry, Western Economic Association International, vol. 52(2), pages 930-957, 04.
  4. Gustavo Márquez & Carmen Pagés, 1998. "Ties That Bind: Employment Protection and Labor Market Outcomes in Latin America," IDB Publications (Working Papers) 4098, Inter-American Development Bank.
  5. Carmen Pagés & Claudio E. Montenegro, 1999. "Job Security and the Age-Composition of Employment: Evidence from Chile," IDB Publications (Working Papers) 4118, Inter-American Development Bank.
  6. Bentolila, Samuel & Bertola, Giuseppe, 1990. "Firing Costs and Labour Demand: How Bad Is Eurosclerosis?," Review of Economic Studies, Wiley Blackwell, vol. 57(3), pages 381-402, July.
  7. Bentolila, Samuel & Saint-Paul, Gilles, 1994. "A model of labor demand with linear adjustment costs," Labour Economics, Elsevier, vol. 1(3-4), pages 303-326, September.
  8. Risager, Ole & Sorensen, Jan Rose, 1997. "On the effects of firing costs when investment is endogenous: An extension of a model by Bertola," European Economic Review, Elsevier, vol. 41(7), pages 1343-1353, July.
  9. Richard Jackman & Richard Layard & Stephen J Nickell, 1996. "Combating unemployment: is flexibility enough?," LSE Research Online Documents on Economics 2214, London School of Economics and Political Science, LSE Library.
  10. Katherine G. Abraham & Susan N. Houseman, 1993. "Does Employment Protection Inhibit Labor Market Flexibility? Lessons from Germany, France and Belgium," Upjohn Working Papers and Journal Articles 93-16, W.E. Upjohn Institute for Employment Research.
  11. Lindbeck, Assar & Snower, Dennis J., 1987. "Union activity, unemployment persistence and wage-employment ratchets," European Economic Review, Elsevier, vol. 31(1-2), pages 157-167.
  12. repec:tpr:qjecon:v:105:y:1990:i:3:p:699-726 is not listed on IDEAS
  13. Guillermo Mondino & Silvia Montoya, 2000. "The Effects of Labor Market Regulations on Employment Decisions by Firms: Empirical Evidence for Argentina," Research Department Publications 3091, Inter-American Development Bank, Research Department.
  14. Ricardo J. Caballero & Mohamad L. Hammour, 1997. "Jobless Growth: Appropriability, Factor Substitution, and Unemployment," NBER Working Papers 6221, National Bureau of Economic Research, Inc.
  15. Richard B. Freeman, 2000. "Single Peaked Vs. Diversified Capitalism: The Relation Between Economic Institutions and Outcomes," NBER Working Papers 7556, National Bureau of Economic Research, Inc.
  16. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," IDB Publications (Working Papers) 43058, Inter-American Development Bank.
  17. Andrew Downes & Nlandu Mamingi & Rose-Marie Belle Antoine, 2004. "Labor Market Regulation and Employment in the Caribbean," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 517-552 National Bureau of Economic Research, Inc.
  18. Hopenhayn, Hugo & Rogerson, Richard, 1993. "Job Turnover and Policy Evaluation: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 101(5), pages 915-38, October.
  19. repec:tpr:qjecon:v:108:y:1993:i:4:p:1015-42 is not listed on IDEAS
  20. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
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