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Enforcement and the Effective Regulation of Labor

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  • Ronconi, Lucas

Abstract

This paper provides new measures of labor law enforcement across the world. The constructed dataset shows that countries with more stringent de jure regulation tend to enforce less. While civil law countries tend to have more stringent de jure labor codes as predicted by legal origin theory, they enforce them less, suggesting a more nuanced version of legal origin theory. The paper further hypothesizes that in territories where Europeans pursued an extractive strategy, they created economies characterized by monopolies and exploitation of workers, which ultimately led to stringent labor laws in an attempt to buy social peace. Those laws, however, applied de facto only in firms and sectors with high rents and workers capable of mobilizing. Finally, it is shown that territories with higher European settler mortality presently have more stringent de jure labor regulations, lower overall labor inspection, and larger differences in effective regulation of bigger firms.

Suggested Citation

  • Ronconi, Lucas, 2015. "Enforcement and the Effective Regulation of Labor," IDB Publications (Working Papers) 7296, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:7296
    DOI: https://doi.org/10.18235/0000211
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    References listed on IDEAS

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    Cited by:

    1. Amrit Amirapu & Michael Gechter, 2020. "Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution," The Review of Economics and Statistics, MIT Press, vol. 102(1), pages 34-48, March.
    2. Ravi KANBUR & Lucas RONCONI, 2018. "Enforcement matters: The effective regulation of labour," International Labour Review, International Labour Organization, vol. 157(3), pages 331-356, September.
    3. Lucas Ronconi & Mercedes Sidders & Benjamin Stanwix, 2016. "The Paradox of Effective Labor Regulation," Working Papers 201605, University of Cape Town, Development Policy Research Unit.

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    More about this item

    Keywords

    Labor; Enforcement; Effective regulation; Legal origin; Colonial origin *; IDB-WP-622;
    All these keywords.

    JEL classification:

    • F54 - International Economics - - International Relations, National Security, and International Political Economy - - - Colonialism; Imperialism; Postcolonialism
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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