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Labour Law & Inclusive Development: the Economic Effects of Industrial Relations Laws in Middle-Income Countries

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  • Simon Deakin
  • Colin Fenwick
  • Prabirjit Sarkar

Abstract

We use leximetric data coding techniques and panel data econometrics to test for the economic effects of laws governing worker representation and industrial action in the large middle-income countries of Brazil, China, India, Russia and South Africa. We find that more worker-protective laws on employee representation tend to be correlated with higher scores on the Human Development Index. By contrast, in the case of laws on industrial action, some negative effects on human development indicators are reported. Our findings imply that laws supporting employee voice and collective bargaining may have beneficial social effects in middle-income countries. We find no rise in unemployment due to more protective labour laws.

Suggested Citation

  • Simon Deakin & Colin Fenwick & Prabirjit Sarkar, 2013. "Labour Law & Inclusive Development: the Economic Effects of Industrial Relations Laws in Middle-Income Countries," Working Papers wp447, Centre for Business Research, University of Cambridge.
    • Handle: RePEc:cbr:cbrwps:wp447
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    References listed on IDEAS

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    1. Prabirjit Sarkar, 2013. "Does an employment protection law lead to unemployment? A panel data analysis of OECD countries, 1990–2008," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 37(6), pages 1335-1348.
    2. Haroon Bhorat & Halton Cheadle, 2009. "Labour Reform in South Africa: Measuring Regulation and a Synthesis of Policy Suggestions," Working Papers 09139, University of Cape Town, Development Policy Research Unit.
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    5. Simon Clarke & Chang‐Hee Lee & Qi Li, 2004. "Collective Consultation and Industrial Relations in China," British Journal of Industrial Relations, London School of Economics, vol. 42(2), pages 235-254, June.
    6. Rob Davies & James Thurlow, 2010. "Formal–Informal Economy Linkages And Unemployment In South Africa," South African Journal of Economics, Economic Society of South Africa, vol. 78(4), pages 437-459, December.
    7. Simon Deakin & Jonas Malmberg & Prabirjit Sarkar, 2013. "Do Labour Laws Increase Equality at the Expense of Higher Unemployment? The Experience of Six OECD Countries, 1970-2010," Working Papers wp442, Centre for Business Research, University of Cambridge.
    8. Deakin, S. & Sarkar, P., 2011. "Indian Labour Law and its Impact on Unemployment, 1970-2006: A leximetric study," Working Papers wp428, Centre for Business Research, University of Cambridge.
    9. Ying ZHU & Malcolm WARNER & Tongqing FENG, 2011. "Employment relations “with Chinese characteristics”: The role of trade unions in China," International Labour Review, International Labour Organization, vol. 150(1-2), pages 127-143, June.
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    More about this item

    JEL classification:

    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law

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