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Legal Origins, Labor Regulations, and Labor Market Outcomes

Author

Listed:
  • Estephane, Pauline Fady
  • Haidar, Jamal Ibrahim

Abstract

Using data from 50 economies, we re-examine the role of legal origins in shaping labor regulations and explore the consequences of these regulations on labor market outcomes. We find that civil law countries tend to adopt more protective labor regulations while common law countries emphasize flexible employment regulations. We document that de jure protective labor regulations create barriers to labor market entry while de facto flexible employment regulations have adverse informal employment and labor productivity consequences. Our results suggest that flexible employment regulations without adequate labor protection laws can encourage labor exploitation, reduce labor productivity, and are insufficient to draw firms and workers into the formal sector.

Suggested Citation

  • Estephane, Pauline Fady & Haidar, Jamal Ibrahim, 2025. "Legal Origins, Labor Regulations, and Labor Market Outcomes," MPRA Paper 127377, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:127377
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    More about this item

    Keywords

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    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • E26 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Informal Economy; Underground Economy
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J46 - Labor and Demographic Economics - - Particular Labor Markets - - - Informal Labor Market
    • J52 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Dispute Resolution: Strikes, Arbitration, and Mediation
    • J83 - Labor and Demographic Economics - - Labor Standards - - - Workers' Rights
    • K1 - Law and Economics - - Basic Areas of Law
    • K10 - Law and Economics - - Basic Areas of Law - - - General (Constitutional Law)
    • K3 - Law and Economics - - Other Substantive Areas of Law

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