TY  - JOUR
AU  - Djankov,Simeon
AU  - Porta,Rafael La
AU  - Lopez-de-Silane,Florencio
AU  - Shleifer,Andrei
AU  - Botero,Juan
TI  - The Regulation of Labor
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9756
PY  - 2003
Y2  - June 2003
UR  - http://www.nber.org/papers/w9756
L1  - http://www.nber.org/papers/w9756.pdf
N1  - Author contact info:
Simeon Djankov
min
E-Mail: sdjankov@minfin.bg

Rafael La Porta
Dartmouth College
Tuck School
210 Tuck Hall
Hanover, NH  03755
Tel: 603/646-3739
E-Mail: rafael.laporta@dartmouth.edu

Florencio Lopez-de-Silanes
EDHEC Business School
393, Promenade des Anglais BP 3116
06202 Nice Cedex 3
France
Tel: +33 (0) 4 93 18 78 07
Fax: +33 (0) 4 93 18 78 41
E-Mail: Florencio.lopezdesilanes@edhec.edu

Andrei Shleifer
Department of Economics
Harvard University
Littauer Center M-9
Cambridge, MA 02138
Tel: 617/495-5046
Fax: 617/496-1708
E-Mail: ashleifer@harvard.edu
M2  - featured in NBER digest on 2004-02-01
AB  - We investigate the regulation of labor markets through employment laws, collective bargaining laws, and social security laws in 85 countries. We find that richer countries regulate labor less than poorer countries do, although they have more generous social security systems. The political power of the left is associated with more stringent labor regulations and more generous social security systems. Socialist and French legal origin countries have sharply higher levels of labor regulation than do common law countries, and the inclusion of legal origin wipes out the effect of the political power of the left. Heavier regulation of labor is associated with a larger unofficial economy, lower labor force participation, and higher unemployment, especially of the young. These results are difficult to reconcile with efficiency and political power theories of institutional choice, but are broadly consistent with legal theories, according to which countries have pervasive regulatory styles inherited from the transplantation of legal systems.
ER  -