IDEAS home Printed from https://ideas.repec.org/p/wbk/wbrwps/1717.html
   My bibliography  Save this paper

Do labor market regulations affect labor earnings in Ecuador?

Author

Listed:
  • MacIsaac, Donna
  • Rama, Martin

Abstract

The authors use the 1994 Living Standards Measurement Survey to show that the impact of labor market regulations, namely mandated benefits, is mitigated by reducing the base earnings on which they are calculated. Therefore, market regulation neither accounts for labor market segmentation nor for slow growth and increased inequality alone. Ecuador's regulations do raise take-home pay, but less than the vast number of benefits would suggest. The increase in labor costs induced by compliance is even smaller than the corresponding increase in take-home pay, because mandated benefits are not subject to social security contributions or payroll taxes. Despite mandated benefits, wage differentials between industries are comparable to those in Bolivia, a country otherwise similar to Ecuador, yet known to have"flexible"labor markets. Compliance with these regulations is associated with significantly higher take-home pay only in the public sector and where trade unions are active -and it is unclear that merely changing the labor code would bring wages down in those two areas. The most dramatic earnings gap, the one between jobs in agriculture and the rest of the economy, appearsto be largely independent of either unions or labor laws. The authors conclude, therefore, that drastically streamlining the cumbersome labor laws, although welcome, would only produce moderate change.

Suggested Citation

  • MacIsaac, Donna & Rama, Martin, 1997. "Do labor market regulations affect labor earnings in Ecuador?," Policy Research Working Paper Series 1717, The World Bank.
    • Handle: RePEc:wbk:wbrwps:1717
    as

    Download full text from publisher

    File URL: http://www-wds.worldbank.org/external/default/WDSContentServer/WDSP/IB/1997/01/01/000009265_3970625094002/Rendered/PDF/multi_page.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Grosh, M.E. & Glewwe, P., 1995. "A Guide to Living Standards Measurement Study Surveys and their Data Sets," Papers 120, World Bank - Living Standards Measurement.
    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. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
    2. Chong, Alberto & Lopez-de-Silanes, Florencio, 2002. "Privatization and labor force restructuring around the world," Policy Research Working Paper Series 2884, The World Bank.
    3. repec:cuf:journl:y:2014:v:15:i:2:chong:lopez-de-silanes is not listed on IDEAS
    4. Alberto Chong & Florencio Lopez-de-Silanes, 2003. "La privatización y la reestructuración de la fuerza laboral en todo el mundo," Research Department Publications 4330, Inter-American Development Bank, Research Department.

    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. Fitch-Fleischmann, Benjamin & Kresch, Evan Plous, 2021. "Story of the hurricane: Government, NGOs, and the difference in disaster relief targeting," Journal of Development Economics, Elsevier, vol. 152(C).
    2. Pushkar Maitra & Ranjan Ray, 2006. "Household expenditure patterns and resource pooling: evidence of changes in post-apartheid South Africa," Review of Economics of the Household, Springer, vol. 4(4), pages 325-347, December.
    3. H.J Smoluk & David VanderLinden, 2004. "Catching up with the Americans," Review of Financial Economics, John Wiley & Sons, vol. 13(3), pages 211-229.
    4. Andrea Brandolini & Anthony B. Atkinson, 2001. "Promise and Pitfalls in the Use of "Secondary" Data-Sets: Income Inequality in OECD Countries As a Case Study," Journal of Economic Literature, American Economic Association, vol. 39(3), pages 771-799, September.
    5. d'Errico, Marco & Di Giuseppe, Stefania, 2018. "Resilience mobility in Uganda: A dynamic analysis," World Development, Elsevier, vol. 104(C), pages 78-96.
    6. Ceema Zahra Namazie, 2002. "Early Evidence of Welfare Changes in the Kyrgyz Republic: Have Things Got Worse with Reforms?," STICERD - Distributional Analysis Research Programme Papers 63, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
    7. Abuelhaj, Tareq & Gassmann, Franziska & O'Donoghue, Cathal, 2018. "Price opinion data in subsidized economies: Empirical evidence from Iraq," MERIT Working Papers 2018-033, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    8. Jean-François Maystadt & Gilles Duranton, 2019. "The development push of refugees: evidence from Tanzania," Journal of Economic Geography, Oxford University Press, vol. 19(2), pages 299-334.
    9. Quisumbing, Agnes R. & Haddad, Lawrence James & Peña, Christine, 2001. "Are women overrepresented among the poor?," FCND discussion papers 115, International Food Policy Research Institute (IFPRI).
    10. Shivani A. Patel & Susan G. Sherman & Subarna K. Khatry & Steven C. LeClerq & Joanne Katz & James M. Tielsch & Parul Christian, 2016. "An Index of Community-Level Socioeconomic Composition for Global Health Research," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 129(2), pages 639-658, November.
    11. De Herdt, Tom, 2004. "Comment mesurer la pauvreté? Une déconstruction méthodologique de l’évolution de la pauvreté monétaire à Kisenso (Kinshasa RDC), 1997-2002," IOB Discussion Papers 2004.06, Universiteit Antwerpen, Institute of Development Policy (IOB).
    12. Whitehouse, Edward, 2000. "How Poor are the Old? A Survey of Evidence from 44 Countries," MPRA Paper 14177, University Library of Munich, Germany.
    13. Fankhauser, Samuel & Tepic, Sladjana, 2007. "Can poor consumers pay for energy and water? An affordability analysis for transition countries," Energy Policy, Elsevier, vol. 35(2), pages 1038-1049, February.
    14. Pradhan, Menno & Ravallion, Martin, 1998. "Measuring poverty using qualitative perceptions of welfare," Policy Research Working Paper Series 2011, The World Bank.
    15. Escobal, Javier, 2001. "The Determinants of Nonfarm Income Diversification in Rural Peru," World Development, Elsevier, vol. 29(3), pages 497-508, March.
    16. repec:idb:brikps:321 is not listed on IDEAS
    17. O.O'Donnel & F.Rosati & E.van Doorslaer, 2002. "Child Labour and Health: Evidence and Research Issues," UCW Working Paper 1, Understanding Children's Work (UCW Programme).
    18. Steckel, Richard H., 2009. "Heights and human welfare: Recent developments and new directions," Explorations in Economic History, Elsevier, vol. 46(1), pages 1-23, January.
    19. Margaret E. Grosh & Paul Glewwe, 1998. "Data Watch: The World Bank's Living Standards Measurement Study Household Surveys," Journal of Economic Perspectives, American Economic Association, vol. 12(1), pages 187-196, Winter.
    20. Quisumbing, Agnes R. & Haddad, Lawrence & Pena, Christine, 2001. "Are women overrepresented among the poor? An analysis of poverty in 10 developing countries," Journal of Development Economics, Elsevier, vol. 66(1), pages 225-269, October.
    21. Ray, Ranjan, 2000. "Child Labor, Child Schooling, and Their Interaction with Adult Labor: Empirical Evidence for Peru and Pakistan," The World Bank Economic Review, World Bank, vol. 14(2), pages 347-367, May.

    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:wbk:wbrwps:1717. 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: Roula I. Yazigi (email available below). General contact details of provider: https://edirc.repec.org/data/dvewbus.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.