TY - JOUR
T1 - The regulation of labor
AU - Botero, Juan C.
AU - Djankov, Simeon
AU - La Porta, Rafael
AU - Lopez-De-Silanes, Florencio
AU - Shleifer, Andrei
N1 - Funding Information:
* This research was supported by the World Bank, the Gildor Foundation, the National Science Foundation, and the International Institute for Corporate Governance at Yale University. We appreciate helpful comments from Daron Acemo-glu, Gary Becker, Olivier Blanchard, Simon Deakin, Richard Freeman, Edward Glaeser, Peter Gourevitch, Simon Johnson, Lawrence Katz, Casey Mulligan, Mark Roe, Christopher Woodruff, and anonymous referees. We also want to thank Patricio Amador, Jose Caballero, Benjamin Chen, Ronald Chen, Eugenio De Bellard, Gabriela Enrigue, Manuel Garcia-Huitron, Eidelman Gonzalez, Magdalena Lopez-Morton, Camila Madrinan, Christian Pfirrmann, Alejandro Ponce-Rodriguez, Kumar Rakhi, Damian Rozo, David Stewart, Franco Tapia, and Deniz Yavuz for excellent research assistance. The complete data set and descriptions of all variables at the country level can be found at http://iicg.som.yale.edu//.
PY - 2004/11
Y1 - 2004/11
N2 - We investigate the regulation of labor markets through employment, collective relations, and social security laws in 85 countries. We find that the political power of the left is associated with more stringent labor regulations and more generous social security systems, and that socialist, French, and Scandinavian legal origin countries have sharply higher levels of labor regulation than do common law countries. However, the effects of legal origins are larger, and explain more of the variation in regulations, than those of politics. Heavier regulation of labor is associated with lower labor force participation and higher unemployment, especially of the young. These results are most naturally consistent with legal theories, according to which countries have pervasive regulatory styles inherited from the transplantation of legal systems.
AB - We investigate the regulation of labor markets through employment, collective relations, and social security laws in 85 countries. We find that the political power of the left is associated with more stringent labor regulations and more generous social security systems, and that socialist, French, and Scandinavian legal origin countries have sharply higher levels of labor regulation than do common law countries. However, the effects of legal origins are larger, and explain more of the variation in regulations, than those of politics. Heavier regulation of labor is associated with lower labor force participation and higher unemployment, especially of the young. These results are most naturally consistent with legal theories, according to which countries have pervasive regulatory styles inherited from the transplantation of legal systems.
UR - http://www.scopus.com/inward/record.url?scp=10644262946&partnerID=8YFLogxK
U2 - 10.1162/0033553042476215
DO - 10.1162/0033553042476215
M3 - Article
AN - SCOPUS:10644262946
SN - 0033-5533
VL - 119
SP - 1339
EP - 1382
JO - Quarterly Journal of Economics
JF - Quarterly Journal of Economics
IS - 4
ER -
