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Who benefits from labor market regulations? Chile 1960-1998

  • Claudio E. Montenegro
  • Carmen Pages

Economists have examined the impact of labor market regulations on the level of employment. But there are many reasons to suspect that the impact of regulations differs across types of workers. In this paper the authors take advantage of the unusually large variance in labor policy in Chile to examine how different labor market regulations affect the distribution of employment and the employment rates across age, gender, and skill levels. To this effect, they use a sample of repeated cross-section household surveys spanning the period 1960-98 and measures of the evolution of job security provisions and minimum wages across time. The results suggest large distribution effects. The authors find that employment security provisions and minimum wages reduce the share of youth and unskilled employment as well as their employment rates. They also find large effects on the distribution of employment between women and men.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3143.

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Date of creation: 01 Oct 2003
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Handle: RePEc:wbk:wbrwps:3143
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  1. Lawrence F. Katz & Alan B. Krueger, 1992. "The Effect of the Minimum Wage on the Fast-Food Industry," ILR Review, Cornell University, ILR School, vol. 46(1), pages 6-21, October.
  2. Edwards, Sebastian & Edwards, Alejandra Cox, 1991. "Monetarism and Liberalization," University of Chicago Press Economics Books, University of Chicago Press, edition 1, number 9780226184890.
  3. Giuseppe Bertola & Francine Blau & Lawrence Kahn, 2007. "Labor market institutions and demographic employment patterns," Journal of Population Economics, Springer, vol. 20(4), pages 833-867, October.
  4. Janet Currie & Bruce C. Fallick, 1996. "The Minimum Wage and the Employment of Youth Evidence from the NLSY," Journal of Human Resources, University of Wisconsin Press, vol. 31(2), pages 404-428.
  5. Raimundo Soto, . "Trade liberalization in Chile:Lessons for Hemispheric Integration," ILADES-Georgetown University Working Papers inv095, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines.
  6. 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.
  7. David Neumark & Mark E. Schweitzer & William L. Wascher, 1999. "The effects of minimum wages throughout the wage distribution," Working Paper 9919, Federal Reserve Bank of Cleveland, revised Feb 2000.
  8. Carmen Pagés-Serra, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, ECONOMIA JOURNAL OF THE LATIN AMERICAN AND CARIBBEAN ECONOMIC ASSOCIATION, vol. 0(Fall 2000), pages 109-154, August.
  9. Steve J. Davis & John Haltiwanger, 1991. "Gross Job Creation, Gross Job Destruction and Employment Reallocation," NBER Working Papers 3728, National Bureau of Economic Research, Inc.
  10. Sebastian Edwards & Alejandra Cox Edwards, 2000. "Economic reforms and labour markets: policy issues and lessons from Chile," Economic Policy, CEPR;CES;MSH, vol. 15(30), pages 181-230, 04.
  11. Bertola, Giuseppe, 1990. "Job security, employment and wages," European Economic Review, Elsevier, vol. 34(4), pages 851-879, June.
  12. Bertola, Giuseppe, 1991. "Labour Turnover Costs and Average Labour Demand," CEPR Discussion Papers 601, C.E.P.R. Discussion Papers.
  13. Card, David & Krueger, Alan B, 1994. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania," American Economic Review, American Economic Association, vol. 84(4), pages 772-93, September.
  14. 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.
  15. Bazen, Stephen & Skourias, Nicolas, 1997. "Is there a negative effect of minimum wages on youth employment in France?," European Economic Review, Elsevier, vol. 41(3-5), pages 723-732, April.
  16. Edward P. Lazear, 1990. "Job Security Provisions and Employment," The Quarterly Journal of Economics, Oxford University Press, vol. 105(3), pages 699-726.
  17. Carmen Pagés & James J. Heckman, 2000. "The Cost of Job Security Regulation: Evidence from Latin American Labor Markets," IDB Publications (Working Papers) 4119, Inter-American Development Bank.
  18. 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.
  19. Alan B. Krueger & David Card, 2000. "Minimum Wages and Employment: A Case Study of the Fast-Food Industry in New Jersey and Pennsylvania: Reply," American Economic Review, American Economic Association, vol. 90(5), pages 1397-1420, December.
  20. 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.
  21. Lang, Kevin & Kahn, Shulamit, 1998. "The effect of minimum-wage laws on the distribution of employment: theory and evidence," Journal of Public Economics, Elsevier, vol. 69(1), pages 67-82, July.
  22. Ricardo Paredes & Luis Riveros, 1989. "Sesgo de Selección y el Efecto de los Salarios Mínimos," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 26(79), pages 367-384.
  23. repec:oup:restud:v:57:y:1990:i:3:p:381-402 is not listed on IDEAS
  24. White, Halbert, 1980. "A Heteroskedasticity-Consistent Covariance Matrix Estimator and a Direct Test for Heteroskedasticity," Econometrica, Econometric Society, vol. 48(4), pages 817-38, May.
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