THE REGULATION OF LABOR* J UAN C. B OTERO S IMEON D … · Bellard, Gabriela Enrigue, Manuel Garcia-Huitron, Eidelman Gonzalez, Mag-dalena Lopez-Morton, Camila Madrinan, Christian

THE REGULATION OF LABOR

JUAN C BOTERO

SIMEON DJANKOV

RAFAEL LA PORTA

FLORENCIO LOPEZ-DE-SILANES

ANDREI SHLEIFER

We investigate the regulation of labor markets through employment collec-tive relations and social security laws in 85 countries We find that the politicalpower of the left is associated with more stringent labor regulations and moregenerous social security systems and that socialist French and Scandinavianlegal origin countries have sharply higher levels of labor regulation than docommon law countries However the effects of legal origins are larger and explainmore of the variation in regulations than those of politics Heavier regulation oflabor is associated with lower labor force participation and higher unemploymentespecially of the young These results are most naturally consistent with legaltheories according to which countries have pervasive regulatory styles inheritedfrom the transplantation of legal systems

I INTRODUCTION

Every country in the world has established a complexsystem of laws and institutions intended to protect the inter-ests of workers and to help assure a minimum standard ofliving for its population In most countries in addition to somebasic civil rights protections this system encompasses threebodies of law employment law collective relations law andsocial security law Employment laws govern the individualemployment contract Collective or industrial relations lawsregulate the bargaining adoption and enforcement of collec-tive agreements the organization of trade unions and theindustrial action by workers and employers Social securitylaws govern the social response to needs and conditions that

This research was supported by the World Bank the Gildor Foundation theNational Science Foundation and the International Institute for Corporate Gov-ernance at Yale University We appreciate helpful comments from Daron Acemo-glu Gary Becker Olivier Blanchard Simon Deakin Richard Freeman EdwardGlaeser Peter Gourevitch Simon Johnson Lawrence Katz Casey MulliganMark Roe Christopher Woodruff and anonymous referees We also want to thankPatricio Amador Jose Caballero Benjamin Chen Ronald Chen Eugenio DeBellard Gabriela Enrigue Manuel Garcia-Huitron Eidelman Gonzalez Mag-dalena Lopez-Morton Camila Madrinan Christian Pfirrmann Alejandro Ponce-Rodriguez Kumar Rakhi Damian Rozo David Stewart Franco Tapia and DenizYavuz for excellent research assistance The complete data set and descriptions ofall variables at the country level can be found at httpiicgsomyaleedu

copy 2004 by the President and Fellows of Harvard College and the Massachusetts Institute ofTechnologyThe Quarterly Journal of Economics November 2004

1339

have a significant impact on the quality of life such as old agedisability death sickness and unemployment

In this paper we examine these laws in 85 countries throughthe lens of three major theories of institutional choice the effi-ciency theory the political power theory and the legal theoryThe efficiency theory holds that institutions adjust to serve theneeds of a society most efficiently Each society chooses a systemof social control of business that optimally combines marketforces dispute resolution in court government regulation andcorrective taxes and subsidies [Djankov et al 2003a] Under thepolitical power theory institutions are shaped by those in powerto benefit themselves at the expense of those out of power Bothvoting and interest group politics allow the winners to benefit atthe expense of the losers with checks and balances on the gov-ernment limiting the extent of redistribution Under the legaltheory a countryrsquos approach to regulation is shaped by its legaltradition Most countries in the world have inherited their basiclegal structures from their colonizers such as the English theFrench the Germans the Portuguese or the Spanish or theirconquerors such as Napoleon or the Soviets The laws of thedifferent colonizers and occupiers belong to different legal tradi-tions which significantly influenced the legal systems of con-quered countries [Zweigert and Kotz 1998 La Porta et al 19971998] In broad terms common and civil law traditions utilizedifferent strategies for dealing with market failure the formerrelying on contract and private litigation the latter on directsupervision of markets by the government Under this theory thehistorical origin of a countryrsquos laws shapes its regulation of laborand other markets1

Our focus on labor laws might be particularly helpful indistinguishing political power and legal theories Roe [2000] andPagano and Volpin [2001] argue that the political power of laborhas been central to legal and regulatory design of the twentiethcentury Using data on OECD countries these authors challengethe observation of La Porta et al [1997 1998] that the differencesin financial development among common and civil law countriesare best understood in terms of legal theories Roe [2000] main-tains that civil law is simply a proxy for social democracy An

1 In footnotes we also consider the cultural theory under which regulationsare shaped by a countryrsquos cultural history such as the dominance of particularreligious groups The data do not support this theory so we keep its discussion toa minimum

1340 QUARTERLY JOURNAL OF ECONOMICS

analysis of labor laws gives these political theories their best shotfor two reasons First we expect leftist governments to regulatelabor markets to benefit their supporters Second because laborlaws are relatively recent we would not expect a profound influ-ence of legal tradition on their structure

To assess these theories we collect data on employmentcollective relations and social security laws as of 1997 for theDjankov et al [2002] sample of 85 countries and code them tomeasure worker protection We combine these data with existing(and some newly collected) information on economic developmentleftist orientation of governments union power political con-straints on government action and legal origins to examine thedeterminants of the regulation of labor We also examine data onthe unofficial economy labor force participation unemploymentand relative wages to consider who benefits and who loses fromthe regulation of labor

The available research on labor regulations is more extensivethan that on most other laws The Organization of EconomicCooperation and Development has sponsored the creation of adatabase of labor regulations in member countries [NicolettiScarpetta and Boylaud 1999 Nicoletti and Pryor 2001] TheWorld Bank has assembled a database of International LaborOffice certifications for 119 countries which provide a partialview of the labor laws as well [Forteza and Rama 2000] Heckmanand Pages-Serra [2000] examine an extensive data set of jobsecurity regulation for Latin American and Caribbean countriesMulligan and Sala-i-Martin [2004] assemble and analyze data onsocial security systems What distinguishes our data from previ-ous efforts is a combination of a significant coverage of countriesand a comprehensive approach to labor market regulations2

In the next section we briefly describe the theories of thedeterminants of labor regulations In Section III we describe thedata In Section IV we illustrate the data by comparing NewZealand and Portugal In Section V we examine the determinantsof labor market regulations In Section VI we compare patterns oflabor regulation to those of other activities In Section VII we lookat the consequences of regulation Section VIII concludes

2 There is also an extensive literature on the consequences of regulation oflabor including Lazear [1990] Besley and Burgess [2003] Fonseca Lopez-Garciaand Pissarides [2000] Heckman and Pages-Serra [2000] and Ichniowski Free-man and Lauer [1989]

1341THE REGULATION OF LABOR

II HYPOTHESES

IIA Background

Why do governments intervene in the labor market Thetheory underlying most interventions is that free labor marketsare imperfect that as a consequence there are rents in the em-ployment relationship and that employers abuse workers to ex-tract these rents leading to both unfairness and inefficiency Forexample employers discriminate against disadvantaged groupsunderpay workers who are immobile or invest in firm-specificcapital fire workers who then need to be supported by the stateforce employees to work more than they wish under the threat ofdismissal fail to insure workers against the risk of death illnessor disability and so on In response to the perceived unfairnessand inefficiency of the free market employment relationshipnearly every state intervenes in this relationship to protect theworkers

Regulation of labor markets aiming to protect workers fromemployers takes four forms First governments forbid discrimi-nation in the labor market and endow the workers with someldquobasic rightsrdquo in the on-going employment relationships such asmaternity leaves or the minimum wage Second governmentsregulate employment relationships by for example restrictingthe range of feasible contracts and raising the costs of both layingoff workers and increasing hours of work Third in response tothe power of employers against workers governments empowerlabor unions to represent workers collectively and protect par-ticular union strategies in negotiations with employers Finallygovernments themselves provide social insurance against unem-ployment old age disability sickness and health or death Thebasic question addressed in this paper is what determines thesechoices of government intervention in the labor market We con-sider three broad theories along these lines

IIB Efficiency

Demsetz [1967] and North [1981] propose that the choice ofinstitutions is dictated primarily by efficiency considerations Inthe present context this approach broadly implies that countrieschoose a combination of labor market interventions to maximizesocial welfare The standard interpretation of this objective iscuring market failures More recent research has focused onidentifying public interventions that are themselves cheapest and


least vulnerable to subversion [Glaeser and Shleifer 2002 2003Glaeser Scheinkman and Shleifer 2003 Djankov et al 2003b]For example countries would choose heavier intervention whenemployer abuse of employees in the market is greater (to curemarket failures) and lighter intervention when distortions asso-ciated with government interference are more severe (to cut socialenforcement costs)

By itself the efficiency theory is too broad to have strongimplications for the extent and consequences of regulation and assuch is difficult to reject We examine two of its plausible but notunambiguous implications First if government intervention inthe labor market in the form of worker protection is efficient thenit should not have large adverse consequences such as unemploy-ment withdrawal of people from the labor force and the growthof the unofficial economy Of course it is possible that the benefitsof regulation to protected workers are higher than these distor-tions making the overall welfare assessment indeterminate Sec-ond if efficiency is the correct model political factors such as thepower of the left or constraints on government would not shaperegulatory choices Again it is possible that some divided societ-ies efficiently require more regulations to preserve social peaceand efficiently pick leftist governments to enact them We showhowever that if anything divided societies regulate less (seefootnote 14) The relationship between efficiency and legal theo-ries is even more complex and we discuss it below

IIC Political Power

According to political power theories institutions are de-signed to transfer resources from those out of political power tothose in power as well as to entrench those in political power atthe helm [Marx 1872 Olson 1993 Finer 1997] In the context oflabor markets these theories imply that labor regulations aremore protective of workers when leftist governments are inpower Such protection can restore efficiency if in a free marketworkers are ldquoabusedrdquo or in lower efficiency if government inter-vention leads to expropriation of capital by labor

Political power theories come in two varieties The first holdsthat the principal mode of political decision making is electionsand that the parties that win them shape laws The secondvariety which applies to both democracies and dictatorshipsholds that laws are shaped by the influence of interest groups[Olson 1965 Stigler 1971 Posner 1974 Becker 1983]


Political power theories are by far the leading explanation ofthe choice of labor regulations In the electoral version they holdthat regulations protecting workers (or at least employed work-ers) are introduced by socialist social-democratic and more gen-erally leftist governments to benefit their political constituencies[Esping-Andersen 1990 1999 Hicks 1999] In the interest groupversion these theories hold that labor regulations respond to thepressure from trade unions and should therefore be more exten-sive when the unions are more powerful regardless of whichgovernment is in charge

Political theories also hold that the ability of those in powerto use regulations to benefit themselves is limited by checks andbalances on the government [Buchanan and Tullock 1962] Dic-tatorships are less constrained than democratically elected gov-ernments and therefore will have more redistributive laws andinstitutions Constitutions legislative constraints and otherforms of checks and balances are all conducive to fewer regula-tions This theory found some empirical support in our previouswork on the regulation of entry [Djankov et al 2002]

IID Legal Theory

Legal theory has received considerable attention in the dis-cussions of institutional evolution This theory emphasizes theemergence of two very distinct legal traditions in Western Europeas far back as the twelfth century namely common law and civillaw and the transplantation of these traditions both within Eu-rope and to the new world through conquest and colonizationImportantly because most countries in the world received theirbasic legal structures in this involuntary way these structuresare exogenous to their economies

Common law emerged in England and is characterized by theimportance of decision-making by juries independent judges andthe emphasis on judicial discretion as opposed to codes FromEngland common law was transplanted to its colonies includingIreland the United States Canada Australia New ZealandIndia Pakistan and other countries in South and East Asia EastAfrica and the Caribbean

Civil law evolved from Roman law in Western Europethrough the middle ages and was incorporated into civil codes inFrance and Germany in the nineteenth century Civil law ischaracterized by less independent judiciaries the relative unim-portance of juries and a greater role of both substantive and


procedural codes as opposed to judicial discretion Through Na-poleonic conquest French civil law was transplanted throughoutWestern Europe including Spain Portugal Italy Belgium andHolland and subsequently to the colonies in North and WestAfrica all of Latin America and parts of Asia

In addition to common law and French civil law three legaltraditions play some role in parts of the world The German codebecame accepted in Germanic Western Europe but also wastransplanted to Japan and from there to Korea and TaiwanSocialist law was adopted in countries that came under the in-fluence of USSR Finally an indigenous Nordic or Scandinavianlegal tradition developed in Sweden Norway Denmark andFinland

The legal theory holds that countries in different legal tradi-tions utilize different institutional technologies for social controlof business [Djankov et al 2003b] Common law countries tend torely more on markets and contracts and civil law (and socialist)countries on regulation (and state ownership)3 As argued byGlaeser and Shleifer [2002] there were efficiency reasons for thechoice of different legal systems in mother countries Howeversince most countries in the world received their legal structuresinvoluntarily their approach to social control of business may bedictated by the history of transplantation rather than indigenouschoice

Legal theory may be consistent with efficiency when onerecognizes enforcement costs Suppose that a country inherits itsbroad legal tradition from its conquerors or colonizers When itdoes so its basic laws the institutions for enforcing the laws andhuman capital of the law enforcers are all shaped by that legaltradition Suppose that now a country decides to regulate a pre-viously unregulated activity such as work Even if it does notwish to borrow the regulations themselves from anywhere in theworld the marginal cost of adopting an approach similar to thatof the mother country is lower than starting from scratch sinceboth people and rules are shared across regulatory activities[Mulligan and Shleifer 2003 2005] It might then be efficient to

3 Legal theories have been tested in other areas Compared with civil lawand particularly French civil law countries common law countries have betterlegal protection of shareholders and creditors [La Porta et al 1997 1998] lighterregulation of entry [Djankov et al 2002] less formalized legal procedures forresolving disputes [Djankov et al 2003b] and securities laws more focused onprivate contracting than regulation [La Porta Lopez-de-Silanes and Shleifer2003]


adopt the same regulatory approach to the new area of regulationas is used elsewhere In this way path dependence in the legaland regulatory styles emerges as an efficient adaptation to thepreviously transplanted legal infrastructure

The legal theory predicts that patterns of regulation of labormarkets should follow the general styles of social control utilizedby each legal system more generally It implies that civil andsocialist law countries would regulate labor markets more exten-sively than do common law countries which preserve the freedomof contract to a greater extent [Deakin 2001] The legal theoryalso predicts that common law countries should have a less gen-erous social security system because they are more likely to relyon markets to provide insurance Finally the legal theory pre-dicts that patterns of regulation of different activities are corre-lated across countries

Legal theories have been challenged by advocates of politicalpower theories such as Roe [2000] and Pagano and Volpin [2001]who argue that at least in Western Europe the civil law traditionhas often coincided with the political pressure to regulate usuallycoming from the left By combining extensive data on politicalorientation and legal origins for a sample of 85 countries weattempt to distinguish the pure political power from the purelegal theory

III MEASURES OF LABOR REGULATION

We constructed a new data set that captures different as-pects of the regulation of labor markets in 85 countries Ourmeasures of labor regulation deal with three broad areas (i)employment laws (ii) collective relations laws and (iii) socialsecurity laws In addition we assembled some data on civil rightslaws in different countries We describe these data and summa-rize the results in footnotes but do not treat this area of law assystematically as the others because there is extensive disagree-ment among the legal scholars as to what constitutes civil rightsFor each of the three areas of law we examine a range of formallegal statutes governing labor markets We then construct sub-indices summarizing different dimensions of such protection andfinally aggregate these subindices into indices We construct allmeasures so that higher values correspond to more extensivelegal protection of workers

As in our previous work we measure formal legal rules


There are two concerns with this approach First it has beenargued that the quality of enforcement of rules varies tremen-dously across countries and therefore formal rules themselvesprovide little information for what happens ldquoon the groundrdquo oroutcomes We cannot measure enforcement directly Howeverhere as elsewhere we can roughly control for enforcement qual-ity In addition despite the broad-brush criticism that formalrules do not matter we show below that here as elsewhereformal rules matter a lot (see La Porta et al [1997 1998 20032004] and Djankov et al [2002 2003b])

Second it has been argued that the focus on formal rules ismisleading because formally distinct legal systems can and doachieve the same functional outcome only through differentmeans In the extreme form the argument holds that in theFrench civil law tradition the practice is just to ldquowrite it downrdquoleading to greater measured formalism and interventionism Inthe present context this argument would hold that the greaterprotection of workers in civil law countries that we might identifyis fictitiousmdashthe common law countries regulate just as muchthrough court decisions which are never ldquowritten downrdquo in stat-utes4 For example Autor [2003] and Krueger [1991] describehow common law courts in the United States have systematicallydeviated from the employment at will doctrine even absent astatutory basis for such deviations

To us this critique is not convincing First virtually all oflabor law is statutory even in common law countries and deviationsfrom statutes are an exception not the rule Second and moreimportantly we construct several of our indices such as the cost ofraising working hours and the cost of firing workers to reflect actualeconomic costs and not just statutory language For these variablesthe distinction between what is written down and what it actuallycosts to do something is minimized At least with some key vari-ables then we are measuring the economic costs of worker protec-tionmdashfunctional differencesmdashand not pure formalism

To codify our measures of worker protection we used a rangeof sources Table I presents brief definitions and sources of the

4 Bertola Boeri and Cazes [2000] examine the enforcement of employmentprotection by courts in a few rich economies and find that courts in the UnitedStates and Canada (common law countries) are less likely to rule for workers thancourts in Spain and France (French civil law countries) This bit of data suggeststhat court enforcement if anything widens the differences between the Frenchcivil law and the common law that we document below


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ber

ofda

ysre

quir

edto

obta

inle

gal

stat

usto

oper

ate

afir

min

1999

Sou

rce

Dja

nkov

etal

[20

02]

Log

cost

tost

art

abu

sine

ssG

DP

per

capi

ta

Nat

ural

loga

rith

mof

the

cost

ofob

tain

ing

lega

lst

atus

toop

erat

ea

firm

asa

shar

eof

per

capi

taG

DP

in19

99S

ourc

eD

jank

ovet

al

[200

2]

Ave

rage

year

sof

scho

olin

gY

ears

ofsc

hool

ing

ofth

eto

tal

popu

lati

onag

edov

er25

Sin

ceth

ere

are

noda

tafo

r19

97w

eus

eth

eav

erag

eof

1995

and

2000

The

only

exce

ptio

nis

Nig

eria

for

whi

chon

ly19

92da

taex

ist

Sou

rce

Bar

roan

dL

ee[2

000]

htt

p

ww

wc

idh

arva

rde

duc

idda

tac

idda

tah

tm

and

for

Nig

eria

Hum

anD

evel

opm

ent

Rep

ort

[199

419

97]


variables used in the paper The unpublished appendix availableat httpiicgsomyaleedu describes all data sources and fulldetails of variable construction (including civil rights5) To ensurecomparability and consistency across countries we consider aldquostandardizedrdquo male worker and a ldquostandardizedrdquo employer6

IIIA Employment Laws

Employment laws regulate the individual employment rela-tion including the alternatives to the standard employment con-tract the flexibility of working conditions and the termination ofemployment To capture all of these aspects we calculate foursubindices (i) alternative employment contracts (ii) cost of in-creasing hours worked (iii) cost of firing workers and (iv) dis-missal procedures Our index of employment laws more so thanother indices reflects the incremental cost to the employer ofdeviating from a hypothetical rigid contract in which the condi-tions of a job are specified and a worker cannot be fired Thisindex is thus an economic measure of protection of (employed)workers and not just a reflection of legal formalism

An employer can reduce his costs by hiring part-time labor orthrough temporary contracts if such practices reduce benefits ortermination costs The first subindex captures the strictness of

5 Civil rights laws seek to stop employment discrimination against vulner-able groups Our index reflects five such mandates prohibition of discriminationon the basis of a) race or b) gender c) the statutory duration of paid maternityleave d) minimum age of employment of children and e) the existence of astatutory or broadly applied minimum wage determined by law or mandatorycollective agreements The ostensible logic behind the last variable is that theminimum wage protects disadvantaged persons against exploitation by those withmore power

6 The standardized male worker has the following characteristics (i) he is anonexecutive full-time employee who has been working in the same firm fortwenty years (ii) his salary plus benefits equal the countryrsquos GNP per workerduring the entire period of employment (iii) he has a nonworking wife and twochildren and the family has always resided in the countryrsquos most populous city(iv) he is a lawful citizen who belongs to the same race and religion as the majorityof the countryrsquos population (v) he is not a member of the labor union (unlessmembership is mandatory) and (vi) he retires at the age defined by the countryrsquoslaws We also assume a ldquostandardizedrdquo employer with the following characteris-tics (i) it is a manufacturing company wholly owned by nationals (ii) its legaldomicile and its main place of business is the countryrsquos most populous city (iii) ithas 250 workers and (iv) it abides by every law and regulation but does not grantworkers more prerogatives than are legally mandated Whenever both a standardduration or payment and a possible extended period of time or payment isprovided by law we choose the standard one These assumptions ensure compa-rability across countries but they are not critical for the results of the paper asvariations in the overall level of labor protection are by far greater across coun-tries than across industries within a country We collected information for aworker who has been employed for three years and the results do not changematerially


protection against such alternative employment contracts Wemeasure whether part-time workers are exempt from mandatorybenefits of full-time workers and whether it is easier or less costlyto terminate part-time workers than full-time workers We alsomeasure whether fixed-term contracts are only allowed for fixed-term tasks and their maximum allowed duration

The second subindex measures the cost of increasing workinghours We assume that our hypothetical firm in each country haseach employee working at 1758 hours per year initially (Den-markrsquos maximum considering all regulations before overtime)and it wants to increase these numbers by 660 hours per year perworker due to increased demand (which would bring it to 2418hours per year per worker Kenyarsquos legal maximum before over-time) We assume that the firm in each country meets the in-creased need for labor by first asking its workers to work up to thecountryrsquos legal maximum then asking them to work overtime atthe statutory wage premiums If neither proves sufficient weassume that the firm must instead hire another complete dupli-cate set of workers each working the initial 1758 hours (ieworkers are complements and each job must be filled with anextra worker to meet the increased demand) Under these as-sumptions we can calculate the cost of accommodating increaseddemand relative to the firmrsquos previous wage bill a measure ofhow strictly employment laws protect workers from being ldquoforcedrdquoto work more

The third subindex captures the economic cost of firing work-ers We construct a scenario where our standardized firm with250 workers fires 50 of them 25 for redundancy and 25 withoutcause The cost of firing workers is computed as the equivalent inpay of the sum of the notice period severance payment and anyother mandatory penalty directly related to the dismissal of theworker7 Because many rules govern when a redundancy or nocause dismissal is allowed we make assumptions to make thescenario comparable across countries8 If the laws of a country do

7 For the cost of firing workers subindex we report results for an employeewith three years of seniority We also calculated the relevant data for a workerwith two and twenty years of seniority with no significant change in results

8 In particular we assume that (i) there is no discrimination and all proce-dures regarding notice periods and social conditions for firing are followed (thisincludes last-in first-out rules as well as seniority and ldquosocial needrdquo criteria) (ii)the negative demand shock puts the firm in ldquomanifest unprofitabilityrdquo and there-fore redundancy dismissal is allowed whenever the law permits it for economicreasons less stringent than outright bankruptcy (iii) whenever permission from a


not allow the firm to fire a worker the cost is set equal to his fullyearrsquos salary

The fourth subindex summarizes the restrictions on employ-ers for firing workers whether individually or collectively Thesemay include notifications approvals mandatory relocation orretraining and priority rules for reemployment Their effect is toraise the costs of dismissal of existing workers beyond thosealready captured in the previous subindex

IIIB Collective Relations Laws

Collective relations laws seek to protect workers from em-ployers through collective action They govern the balance ofpower between labor unions and employers and associations ofemployers9 We deal with two subareas of these laws (i) thepower granted by the law to labor unions and (ii) the laws gov-erning collective disputes

The subindex of labor union power measures the power oflabor unions over working conditions Many countries protect bylaw the right to unionization the right to collective bargainingand the obligation of employers to engage in it In some countriescollective agreements are extended to third parties as a matter ofpublic policy at the national or sectoral levels whereas in othersthey only extend to nonsignatory workers at the plant level oronly bind the parties to the agreement Laws in some countriesmandate closed shops and even give unions the right to appointsome directors of firms Finally many countries require by lawthe creation of workersrsquo councils to look after the best interests ofemployees

The second subindex measures protection of employees en-gaged in collective disputes Some countries enshrine the right ofworkers to engage in collective action in their constitutions andallow wildcat strikes (not authorized by the labor union) politicalstrikes (to protest government policy on nonwork-related issues)

third party (courts government regulators worker councils or labor unions) isrequired prior to dismissing a worker third party consents to the dismissal (iv) ifpermission from a third party is required for a dismissal without cause the thirdparty does not allow it (v) if dismissal without cause is not allowed but the lawestablishes a clearly defined penalty for firing the worker (which does not includemandatory reinstatement) the employer fires the employee and pays the fine

9 Some provisions aim to protect workers from other workers For instanceldquoright-to-workrdquo laws in the United States protect workers from unions by prohib-iting the exclusive hiring of union labor Such cases are rare and the bulk ofcollective relations provisions protect workers from employers


and sympathy strikes (to support the claims of workers otherthan the striking workers) Others do not Procedural restrictionson the right to strike may include majority voting advance noticerequirements prohibitions on strikes while a collective agree-ment is in force and the obligation to go through conciliationprocedures before the strike may take place Employer defensesmay include bans on lockouts and on employersrsquo retributionagainst strikers such as the termination of employment of strik-ing workers and the hiring of replacement labor during a lawfulstrike Finally in many countries one (normally the employer) orboth of the parties may be subject to arbitration against their will

IIIC Social Security Laws

The bulk of social security expenditure across countries ad-dresses old-age pensions sickness and health care coverage andunemployment Following the design of the decommodificationindex of Esping-Andersen10 our variables cover the risks of (i) oldage disability and death (ii) sickness and health and (iii) un-employment For each we code four variables to measure thegenerosity of the social security system

The construction of each subindex is slightly different but allcapture the generosity of benefits by measuring the percentage ofthe net previous salary covered by net benefits This measureapproximates the living standard a worker would enjoy consid-ering the effects of the tax structure and the duration for whichbenefits are received11 A second driver of generosity is the costborne by the worker for the privilege of social security coverageWe approximate this by measuring the required months of con-tribution or of covered employment required by law to qualifyfor a standard pension or to enjoy unemployment and sicknessbenefits as well as the percentage of the workerrsquos monthlysalary deducted by law to cover these Finally we consider thelength of the waiting period before receiving benefits

10 Esping-Andersen used the share of the relevant population covered as aweight for the variables in his index for eighteen developed countries Thisinformation is not available for a large sample of countries so we present theunweighted data The correlation between the Esping-Andersen index and ourindex of social security laws for the eighteen countries in his sample is 038

11 Countries vary in the type of pension system they have including lump-sum systems private systems and systems that provide fixed benefits to every-one Table I and Appendix 1 (available on-line at httpiicgsomyaleedu) de-scribe the details of our calculations


IIID Aggregation

For each of our three areas of law we construct an aggregateindex by averaging the subindices for the particular area This isnot the only possible aggregation procedure but it is transparentTable II presents the correlations between the various subindicesand indices of labor regulation The table shows for example thatthe four subindices of the employment laws index are highlycorrelated with each other as are the two subindices of thecollective relations law index and the three subindices of thesocial securities law index The correlations between employmentand collective relations indices and subindices are high and sig-nificant as well inconsistent with the notion of substitution be-tween different kinds of regulation

IIIE Independent Variables

We assemble data on a number of potential determinants oflabor regulations as well as some labor market outcomes Wemeasure development using the (logarithm of) per capita incomein 1997 (the year the regulations are measured) and the averageyears of schooling of the population over 25 years of age fromBarro and Lee [2000]

To measure politics we expand back to 1928 the World Bankdata recording the fraction of years between 1975 and 1995 thateach countryrsquos chief executive or the largest party in the legisla-ture or both was rightist leftist or centrist We present resultsfor the fraction of years during 1928ndash1995 and 1975ndash1995 whenthe chief executive AND the legislature were of left or centristorientation (these variables yield the strongest results for thepolitical theories) We use union density to proxy for the influenceof labor interest groups To measure political constraints we takeaverage ldquoautocracyrdquo between 1950 and 1990 from Alvarez et al[2000] and the 1975ndash1995 averages of proportional representa-tion and divided government from Beck et al [2001]12

12 We have gathered additional variables that measure political orientationas well as political and economic constraints Additional measures of politicalorientation include the fraction of years when the chief executive was of left andcentrist orientation the fraction of years when the legislature was of left orcentrist political orientation and the percentage of the labor force covered bycollective agreements Alternative measures of political constraints are the effec-tiveness of the legislature and constraints of the executive We also used alterna-tive measures of proportional representation and divided government from vari-ous sources including plurality rules in the legislature chambers and the sum ofthe square of the total share of the congress controlled by each party Finally ourmeasures for economic constraints are actual trade openness in 1985 geographicopenness and factor accumulation openness from Frankel and Romer [1999]


TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

DS

UB

IND

ICE

S

Th

ista

ble

pres

ents

pair

wis

eco

rrel

atio

ns

betw

een

our

vari

ous

mea

sure

sof

regu

lati

onof

labo

rA

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

Em

plo

ymen

tla

ws

ind

ex

Alt

erna

tive

empl

oym

ent

cont

ract

s

Cos

tsof

incr

easi

ngho

urs

wor

ked

Cos

tof

firin

gw

orke

rsD

ism

issa

lpr

oced

ures

Col

lect

ive

rela

tion

sla

ws

ind

ex

Lab

orun

ion

pow

erC

olle

ctiv

edi

sput

es

Soc

ial

secu

rity

law

sin

dex

Old

-age

di

sabi

lity

and

deat

hbe

nefit

s

Sic

knes

san

dhe

alth

bene

fits

Alt

erna

tive

empl

oym

ent

cont

ract

s0

4702

a

Cos

tof

incr

easi

ngho

urs

wor

ked

079

48a

014

11C

ost

offir

ing

wor

kers

065

90a

025

14b

031

70a

Dis

mis

sal

proc

edur

es0

6868

a0

1996

c0

2891

a0

3877

a

Col

lect

ive

rela

tion

sla

ws

ind

ex0

4894

a0

2792

a0

2911

a0

2466

b0

5109

a

Lab

orun

ion

pow

er0

3772

a0

2160

b0

2859

a0

1336

034

04a

075

68a

Col

lect

ive

disp

utes

034

01a

019

32c

013

600

2321

b0

4125

a0

7100

a0

0770

Soc

ial

secu

rity

law

sin

dex

023

39b

017

650

3011

a0

0931

0

0165

022

75b

022

77b

010

17O

ld-a

ged

isab

ility

an

dde

ath

bene

fits

017

320

2206

b0

1749

0

0238

007

070

1338

007

380

1246

058

25a

Sic

knes

san

dhe

alth

bene

fits

014

320

1063

013

130

1924

c

002

830

1643

011

720

1244

084

43a

037

42a

Une

mpl

oym

ent

bene

fits

023

82b

014

750

3699

a0

0142

0

0324

022

32b

028

63a

003

210

8795

a0

3649

a0

5418

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


To test legal theories we use legal origin of commercial lawsfrom La Porta et al [1999] which classifies close to 200 countriesLabor market outcomes include the size of the unofficial economylabor force participation unemployment including that of theyoung and a crude measure of relative wages of protected andunprotected workers

IV A LOOK AT THE DATA

A comparison of New Zealand and Portugal two countries ofroughly similar income level can serve to illustrate our indices Inthe area of employment laws neither country exempts part-timeworkers from mandatory benefits of full-time workers and nei-ther makes it easier or less costly to terminate them Fixed termcontracts can be entered in New Zealand for any reason andthere is no maximum duration provided by the law In Portugalsuch contracts are allowed for a maximum of three years aregranted for specific situations (such as substitution for anotherworker or seasonal activity) and are therefore temporary innature The alternative employment subindex for New Zealand is050 while for Portugal it is 091

The Portuguese Constitution regulates working times andleaves remuneration and working conditions matters that inNew Zealand are normally regulated by collective bargaining orleft to the individual employment contract The premium forovertime work in Portugal is 50 percent for the first six hours perweek and 75 percent for every hour thereafter there are 24 daysof paid annual leave and there is a cap of 200 hours of overtimeper year New Zealand mandates no premium for overtime workhas no quantitative restrictions on night work and grants onlyfifteen days of paid leave The result of this is that the cost ofincreasing working hours in Portugal is equal to the maximum inour sample (100) while the cost in New Zealand is the lowest inour sample (000)

In New Zealand notice period and severance pay are notregulated by statute while in Portugal the minimum notice pe-riod and severance period that may be paid are strictly regulatedfor example a worker with three years seniority fired for redun-dancy in Portugal is entitled to one month of notice and threemonths of severance pay Dismissal without cause is allowed inNew Zealand but constitutionally forbidden in Portugal These


factors explain why New Zealand has the lowest cost of dismissalin our sample (000) while Portugal has one of the highest (061)

In New Zealand a reasonable advance notice is generallyconsidered a fair reason for termination for redundancy Portu-gal on the other hand has a public policy list of fair grounds fortermination and stringent procedural limitations on dismissalsuch as mandatory notification of the government permission inthe case of collective dismissal and priority rules for reemploy-ment of redundant workers These differences are reflected in thedismissal procedures subindex where New Zealand scores a 014and Portugal a much higher 071

These differences add up to the employment laws index of016 for New Zealand (one of the lowest in the world) and 081 forPortugal (one of the highest)

In collective relations laws the Portuguese Constitutionguarantees the rights to form trade unions and to engage incollective bargaining Employers have a legal duty to bargainwith unions collective agreements are extended to third partiesby law and workersrsquo councils allowing workers to participate inmanagement are mandatory In New Zealand these issues arenot regulated by law For example once a bargaining agent hasestablished its authority to represent an employee the employermust recognize his authority but there is no obligation upon theemployer to negotiate with this agent In New Zealand as inPortugal the law does not allow closed shops These differencesexplain why the subindex of labor union power for New Zealandis 0 the lowest possible while Portugalrsquos is 071 the highest inour sample

Regarding collective disputes the two countries are similarThe right to strike is protected in both countries but while it is amere freedom in New Zealand it is a constitutional right inPortugal Employer lockouts are allowed in New Zealand but notin Portugal New Zealand does not mandate a waiting period ornotification before strikes can occur while Portugal requires em-ployers to be notified before the strike In both countries employ-ers are not allowed to fire or replace striking workers there is nomandatory conciliation procedure before a strike and compulsorythird-party arbitration during a labor dispute is not mandatoryThe overall collective disputes subindex is 058 in Portugal and050 in New Zealand the overall collective relations laws index is065 for Portugal compared with 025 for New Zealand


Although social security is regulated by the Constitution inPortugal but not in New Zealand the two countries have simi-larmdashand generousmdashsystems In the case of old-age disabilityand death insurance workers in New Zealand are not onlyobliged to contribute less to their retirement but can also expectto enjoy their benefits for 134 years while those in Portugal onlyexpect 105 years The percentage of the previous net wagecovered by net benefits is 76 percent in New Zealand and only58 percent in Portugal For the overall old-age disability anddeath benefits subindex New Zealand scores a 084 and Por-tugal only 060

Sickness and health benefits in Portugal require six monthsof contributions before benefits can be claimed 317 percent of theworkersrsquo monthly pay is deducted to pay for insurance and thereis a waiting period of three days between the time the employeefalls ill and payments begin New Zealand has no minimumcontribution conditions no waiting period and does not deductpay from workers to cover for insurance Net benefits in Portugalcover approximately 65 percent of the net previous wage whilebenefits in New Zealand are income tested and our model workerfalls above the threshold These differences roughly cancel eachother out New Zealand has a sickness and health benefits sub-index of 075 and Portugal of 070

For unemployment benefits New Zealand has no minimumcontribution period while Portugal mandates eighteen monthsHowever Portugal has no waiting period from the time an em-ployee is fired and when he can claim benefits while a worker inNew Zealand must wait for 70 days The benefits received are alsomore generous in Portugal the net benefit is 77 percent of netprevious wages while only 25 percent in New Zealand The re-sults of this are that the subindex of unemployment benefits is056 for New Zealand and a much higher 090 for Portugal

The three measures of social security translate into a slightlyhigher score in the social security laws index of 074 for Portugalthan 072 given to New Zealand

Table III presents for each country the indices of employ-ment collective relations and social security laws as well as thelogarithm of GDP per capita in 1997 the fraction of years during1928ndash1995 when the chief executive and the legislature were ofleft or centrist orientation and the legal origin The table alsopresents the means and medians of the data across income


TABLE IIIMAIN INDICATORS BY COUNTRY

Panel A of this table shows the indices of employment laws collective relations laws andsocial security laws as well as the log of GNP per capita for 1997 the percentage of yearsbetween 1928 and 1995 during which both the party of the chief executive and the largestparty in congress had left or center orientation and the legal origin of each country Panels BC and D present summary statistics for the cross section of countries by GNP per capitadegree of leftcenter political orientation and legal origin respectively All variables aredescribed in Table I and the data can be found at httpiicgsomyaleedu

Employmentlaws index

Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive

and largestparty incongress

have left orcenter

politicalorientation

(1928ndash1995) Legal origin

Panel A DataArgentina 03442 05774 07154 90070 04559 FrenchArmenia 06017 05179 07337 62538 10000 SocialistAustralia 03515 03720 07820 100110 03529 EnglishAustria 05007 03601 07139 102481 02353 GermanBelgium 05133 04226 06240 101988 00882 FrenchBolivia 03728 04613 03702 68773 04412 FrenchBrazil 05676 03780 05471 84638 02206 FrenchBulgaria 05189 04435 07610 70648 07059 SocialistBurkina Faso 04396 05268 01447 54806 09429 FrenchCanada 02615 01964 07869 99179 06912 EnglishChile 04735 03810 06887 85112 03824 FrenchChina 04322 03304 07643 65511 06765 SocialistColombia 03442 04851 08131 78241 03676 FrenchCroatia 04879 04524 06797 83802 06765 SocialistCzech Republic 05205 03393 06981 85698 08382 SocialistDenmark 05727 04196 08727 104406 07353 ScandinavianDominican Republic 05972 02715 04876 74384 01176 FrenchEcuador 03966 06369 06542 73588 03971 FrenchEgypt 03683 04107 07550 70901 08382 FrenchFinland 07366 03185 07863 101511 07941 ScandinavianFrance 07443 06667 07838 101601 03382 FrenchGeorgia 07713 05685 04491 63456 10000 SocialistGermany 07015 06071 06702 102608 02941 GermanGhana 02881 04821 01576 59662 07368 EnglishGreece 05189 04851 07386 94222 02059 FrenchHong Kong 01696 04554 08050 101382 02794 EnglishHungary 03773 06071 07275 84141 06618 SocialistIndia 04434 03839 04003 60403 10000 EnglishIndonesia 06813 03929 01772 70121 01957 FrenchIreland 03427 04643 07144 98924 00000 EnglishIsrael 02890 03095 08068 97238 07660 EnglishItaly 06499 06310 07572 99311 03235 FrenchJamaica 01628 02262 01677 75229 04242 EnglishJapan 01639 06280 06417 105545 00147 GermanJordan 06977 03810 02099 73840 00000 FrenchKazakhstan 07796 06815 02778 72298 10000 SocialistKenya 03687 02262 03114 58579 10000 EnglishKorea 04457 05446 06774 93405 04000 GermanKyrgyz Republic 07459 04613 07678 61527 09412 SocialistLatvia 07211 05327 07023 77407 07647 Socialist


Lebanon 05024 04137 03948 81197 01923 FrenchLithuania 06233 04970 07458 77053 07941 SocialistMadagascar 04749 04643 02003 55215 10000 FrenchMalawi 01833 02470 00000 53471 01290 EnglishMalaysia 01885 01875 01950 84338 00000 EnglishMali 06674 03929 01658 55607 03429 FrenchMexico 05943 05774 05063 82188 10000 FrenchMongolia 03256 02292 07383 60403 09706 SocialistMorocco 02616 04881 05165 71309 00000 FrenchMozambique 07946 05804 04452 51930 10000 FrenchNetherlands 07256 04643 06282 102128 02647 FrenchNew Zealand 01607 02500 07188 96909 04559 EnglishNigeria 01929 02054 03447 55984 05429 EnglishNorway 06853 06488 08259 105018 07059 ScandinavianPakistan 03433 03095 04714 62344 04375 EnglishPanama 06246 04554 07431 80163 05000 FrenchPeru 04630 07113 04167 77832 04265 FrenchPhilippines 04762 05149 04941 71148 03469 FrenchPoland 06395 05655 06459 81775 09118 SocialistPortugal 08088 06488 07352 93281 00882 FrenchRomania 03273 05565 07411 72442 09265 SocialistRussian Federation 08276 05774 08470 78633 09412 SocialistSenegal 05099 05744 03835 62729 10000 FrenchSingapore 03116 03423 04618 102198 03000 EnglishSlovak Republic 06571 04524 07284 82584 08824 SocialistSlovenia 07359 04851 07755 91973 07353 SocialistSouth Africa 03204 05446 05753 82134 00147 EnglishSpain 07447 05863 07660 96382 03088 FrenchSri Lanka 04685 05060 01945 66720 08298 EnglishSweden 07405 05387 08448 102306 08529 ScandinavianSwitzerland 04520 04167 08151 106782 06912 GermanTaiwan 04534 03155 07478 92519 00000 GermanTanzania 06843 03244 00880 53471 10000 EnglishThailand 04097 03571 04707 79302 00735 EnglishTunisia 08158 03810 07063 76401 09744 FrenchTurkey 04026 04732 04777 80678 05441 FrenchUganda 03530 03810 01088 57683 09697 EnglishUkraine 06609 05774 08499 69177 10000 SocialistUnited Kingdom 02824 01875 06915 99763 02794 EnglishUnited States 02176 02589 06461 103129 07059 EnglishUruguay 02762 03542 06778 87641 05000 FrenchVenezuela 06509 05357 07299 81662 05441 FrenchVietnam 05401 04821 05198 58290 10000 SocialistZambia 01480 02914 01055 59135 10000 EnglishZimbabwe 02513 04435 01623 65793 05000 EnglishSample mean 04876 04451 05690 80213 05646Sample median 04749 04554 06774 80163 05441

Panel B Data by GNP per capitaBelow median Mean 04889 04408 04481 66285 06846

Median 04657 04613 04471 66256 08120Above median Mean 04862 04493 06872 93817 04473

Median 05007 04554 07154 96382 04000

Panel C Data by leftcenter political orientationBelow median Mean 04378 04345 05504 84929 02676


Median 05205 04732 07063 72442 08824


groups degrees of leftist political orientation and legal originsAt first glance the data suggest that richer countries have moregenerous social security systems than poorer ones but otherwisesimilarly protective labor laws that countries with more left-wing governments have more protective laws than those with lessleftist ones and that common law countries protect labor lessthan do those from the four civil law traditions Below we exam-ine these data systematically

V TESTING THE THEORIES

In Table IV we examine the relationship between the protec-tion of workers and two of its potential determinants income percapita and legal origin There is no evidence that employmentlaws or collective relations laws vary with the level of economicdevelopment This result is inconsistent with the implication ofthe efficiency hypothesis that rich countries should regulate lessbecause they have fewer market failures In contrast there isclear evidence that richer countries have more generous socialsecurity systems both as measured by the aggregate index andfor old-age health and unemployment benefits separately

TABLE III(CONTINUED)


Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive

andlargestparty incongresshave leftor centerpolitical

orientation(1928ndash1995)

Panel D Data by legal origin

English legal Mean 02997 03313 04236 78045 05204origin Median 02886 03170 04311 77266 04779

Socialist legal Mean 05944 04925 06923 73650 08646origin Median 06233 04970 07337 72442 09118

French legal Mean 05470 04914 05454 79034 04484origin Median 05161 04792 05855 79202 03750

German legal Mean 04529 04787 07110 100557 02725origin Median 04527 04807 06957 102545 02647

Scandinavian legal Mean 06838 04814 08324 103310 07721origin Median 07110 04792 08354 103356 07647


The results in Table IV also show that legal origin mattersfor several areas of labor law In employment laws all categoriesof civil law countries have higher values of the index than do thecommon law countries and the differences are quantitativelylarge for French socialist and Scandinavian legal origins Theexplanatory power of legal origins is high the R2 of the regressionis 44 percent Differences among legal origins are also large forcollective relations laws with common law countries being lessprotective of workers than civil law countries The R2 here is 31percent With social security laws the picture is more complexSocialist Scandinavian and French legal origin countries butnot German legal origin countries have more generous systemsthan do the common law countries Since income is so importantfor social security laws the R2 of this regression rises to a some-what unbelievable 64 percent In short legal traditions are astrikingly important determinant of various aspects of statutoryworker protection with French and socialist legal origin coun-tries being most interventionist consistent with the evidence onregulation of other aspects of economic life [La Porta et al 1999Djankov et al 2002]

Panel D of Table IV focuses on Roersquos [2000] hypothesis thatcivil law is a proxy for social democracy by rerunning the regres-sions for the three aggregate law indices using the subsample ofnondemocracies during 1950ndash1995 Even in nondemocracies le-gal origin remains an important determinant of employmentcollective relations and social security laws inconsistent withthe view that it proxies for social democracy This result is robustto a variety of definitions of nondemocracy we have tried

Table V examines the effect of politics on labor laws holdingper capita income constant Countries with longer histories ofleftist or centrist governments between 1928 and 1995 as well asbetween 1975 and 1995 have heavier regulation of labor mar-kets as measured by employment collective relations and socialsecurity laws (five out of six coefficients are statistically signifi-cant)13 Higher union density is also associated with strongerworker protection These results support political theories whichhold that worker protection comes from their political poweralthough the explanatory power of the political variables is

13 These results also hold mostly although at lower levels of statisticalsignificance if we use the pure leftist government variables (rather than thecombination of leftist and centrist governments) or if we use the executive or thelegislative branch separately


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sharply lower than that of legal origins as reflected in the lowerR2 of these regressions14

In addition Table V presents mixed evidence on the impor-tance of constraints on government Countries with proportionalrepresentation have more protective employment and collectiverelations laws suggesting that constraints on the executive leadto more protection But the result does not hold for other vari-ables These results offer mixed support for the view that con-straints on government lead to less intervention in marketsHowever they do provide some support for the Alesina-Glaeser[2004] theory that proportional representation as a form of de-mocracy is a reflection of labor power as are the laws protectinglabor15

Table VI presents the results of a horse race between legalorigins and politics We exclude socialist legal origin countriesfrom the sample because of extremely high correlations betweenleftist variables and socialist origin but all the results hold on alarger sample as well Legal origin wins out and accounts for thebulk of the R2 In six out of nine regressions the proxies forpolitics lose their consistent influence on the regulation of laborIn contrast the difference between common law and French legalorigin countries is always statistically significant The averageFrench legal origin country has employment and collective rela-tions laws scores 50 to 100 percent higher than the averagecommon law country German and Scandinavian legal origincountries continue to be more protective than common law coun-tries although the results are not quite as consistent as in TableV for Scandinavian legal origin We conclude that the effects of

14 We ran regressions with more variables that are related to the politicalview of regulation The results show that the Gini coefficient has a significantnegative effect on all but collective relations laws Measures of ethnic linguisticand religious heterogeneity from Alesina et al [2003] also have a negative effectinconsistent with the theory that labor laws are efficiently more protective ofworkers when social divisions are greater Tax efficiency affects negatively collec-tive relations laws only Finally public old-age pensionsGNP (1960ndash1995) hassignificant positive effects on employment and social security laws Once wecontrol for legal origin however all these go away except the effect of publicpensions on employment and collective relations laws at the 10 percent signifi-cance level

15 Other measures of political constraints impact labor regulation withoutlegal origin control but not once we control for legal origin Economic constraintson government measured by proxies for trade openness from Frankel and Romer[1999] have a weak impact on employment laws and collective relations laws butdo affect social security laws when controlling for legal origin


legal origin on the regulation of labor are larger and differentfrom those of politics16

This evidence does not suggest that politics does not matterbut it is inconsistent with the extreme hypothesis that law is justa proxy for social democracy The importance of legal originmdashandthe unimportance of per capita incomemdashis also difficult to recon-cile with the efficiency theory of regulation of labor except for theversion that sees the efficiency of regulatory schemes stemminglargely from their compatibility with the countryrsquos broader legalframework17

VI REGULATION IN DIFFERENT DOMAINS

One of the strongest implications of the legal theory is thatsocieties have regulatory styles shaped in part by their legalsystems and that therefore societies that regulate one activityare also expected to regulate others which might be totally un-related We have already shown in earlier work that French civillaw countries regulate entry of new firms dispute resolution incourts and other activities more heavily than do common lawcountries [La Porta et al 1999 Djankov et al 2002 2003b] Thefindings of this paper are broadly consistent with this research

Table VII presents the correlations between our measures ofregulation of labor and the measures of regulation of entry fromDjankov et al [2002] and of legal formalism from Djankov et al[2003b] The data show that all these aspects of regulation gotogether even though the methodologies of data collection differtremendously across the three studies The correlation betweenthe employment laws index and the judicial formalism index is033 for one case and 041 for the other The correlation betweenthe employment laws index and the logarithm of the number ofsteps required to start a business is 034 These correlations fallby about 005 if we exclude socialist countries but remain highlystatistically significant The numbers are even higher for the

16 We also considered the effects of the religious composition of the popula-tion in 1900 and in 1980mdashour proxy for culturemdashon contemporary labor lawsThere are no statistically significant effects of religious variables measured in1900 For 1980 measures we find that catholic countries have more protectivecollective relations and social security laws but the significance is small andtypically does not survive a control for legal origin

17 Our index of civil rights laws described in footnote 6 does not depend onincome per capita is higher in socialist countries but does not otherwise dependon legal origins It is strongly correlated with leftist government measures evencontrolling for legal origin


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dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

14a

009

280

1146

a0

0307

008

52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

[07

1]

Un

ion

den

sity

010

61a

0

0674

008

06c

002

320

1506

b

035

82a

57(0

012

7)(0

111

1)(0

044

5)(0

053

9)(0

073

0)(0

109

0)[0

63]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

056

75a

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

033

35a

036

63a

0

2949

a0

5274

a0

5525

a0

8263

a

Log

(cos

tto

star

ta

busi

nes

sG

DP

per

capi

ta)

017

220

1721

0

4737

a0

3667

a0

4309

a0

6354

a0

6147

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


collective relations laws although generosity of social securitysystems is negatively correlated with entry regulation (becauseincome matters for both in opposite directions) Regulatory styleis pervasive across activitiesmdashconsistent with the legal theory

VII OUTCOMES

Finally we consider some of the consequences of the regula-tion of labor This is of interest for two reasons First efficiencytheories predict that heavier regulation of labor markets shouldbe associated with better and certainly not worse labor marketoutcomes This prediction has been contradicted by a variety ofempirical studies from Lazear [1990] to Besley and Burgess[2003] and here we confirm their findings Second if the regula-tion of labor is damaging at least to some workers then whobenefits from it Put differently is there political support for theheavier regulation of labor or does legal origin simply provide apolitically unsupported ldquotechnologyrdquo for the social control of labormarkets

We look at several potential consequences of labor regula-tion These include the size of and the employment in the unof-ficial economy male and female participation in the labor forceand unemployment computed separately for everyone and formale and female workers aged 20ndash24 In addition as a crudemeasure of relative wages of protected and unprotected workerswe consider the average wage of machine operators relative tothat of clerks and workers in craft and related trades All of thesevariables have measurement problems particularly for the de-veloping countries where some employment is informal and notrecorded in official statistics Still by looking at the variousdimensions of the data we hope to get a general picture

Table VIII presents the results In all specifications we con-trol for average years of schooling (which is less likely to be itselfcaused by regulations than income per capita) as a proxy for thequality of law enforcement18 The strength of the results variesacross specifications but in general they show no benefits andsome costs of labor regulation There is some evidence that more

18 As alternative enforcement measures we used the length of court pro-ceedings in collecting a bounced check and evicting a tenant from Djankov et al[2003b] with no change in results


TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


protective collective relations laws (but not others) are associatedwith a larger unofficial economy that more protective employ-ment collective relations and social security laws lead to lowermale (but not female) participation in the labor force and thatmore protective employment laws lead to higher unemploymentespecially of the young Finally there is some evidence that moregenerous social security systems are associated with higherrelative wages of privileged workers The evidence on the un-employment of the young is most consistent with the politicalview that the privileged and older incumbents support morestringent labor laws a finding broadly consistent with otherresearch [Blanchflower and Freeman 2000]

As an additional way to examine enforcement we divide thesample into countries with per capita income above and below themedian and replicate the analysis in Table VIII The results holdamong the richer but generally not the poorer countries Thisevidence is consistent with the view that labor laws haveadverse consequences in countries where they are more likelyto be enforced namely the richer ones This evidence shedsfurther doubt on the efficiency theory since it confirmsthe damage from regulation precisely when the laws have abigger bite

We also reestimated the regressions in Table VIII with in-strumental variables using legal origins (either just the commonlaw dummy or all of them) as instruments The results for malelabor force participation and the unemployment rates particu-larly of the young remain statistically significant in most casesand many coefficients rise in magnitude The results on therelative wages of privileged and less privileged workers becomestronger

All of this evidence does not provide much support for theefficiency theory namely that labor regulations cure market fail-ures although of course it is possible that the adverse outcomeswe measure are unavoidable to alleviate capitalist abuse of work-ers The results are consistent with the view that legal originsshape regulatory styles and that such dependence has adverseconsequences for at least some measures of efficiency

VIII CONCLUSION

There are three broad theories of government regulation oflabor Efficiency theories hold that regulations adjust to effi-


ciently address the problems of market failure Political theo-ries contend that regulations are used by political leaders tobenefit themselves and their allies Legal theories hold that thepatterns of regulation are shaped by each countryrsquos legal tra-dition which is to a significant extent determined by trans-plantation of a few legal systems We examined the regulationof labor markets in 85 countries through the lens of thesetheories

As we indicated the efficiency theory is difficult to rejectbut we do not find much support for conventional versions Inparticular we find that heavier regulation of labor has adverseconsequences for labor force participation and unemploymentespecially of the young There is some support for the view thatcountries with a longer history of leftist governments havemore extensive regulation of labor consistent with the politicaltheory There is finally strong evidence that the origin of acountryrsquos laws is an important determinant of its regulatoryapproach in labor as well as in other markets Moreover legalorigin does not appear to be a proxy for social democracymdashitsexplanatory power is both independent and significantlylarger This evidence is broadly consistent with the legal the-ory according to which patterns of regulation across countriesare shaped largely by transplanted legal structures

These results do not mean that efficiency forces in regulationare unimportant and indeed our focus on a large sample ofdeveloping countries as opposed to just the rich ones where thelaw evolves more quickly predisposes our findings against theefficiency hypothesis These findings also do not mean that poli-tics is unimportant and indeed we find evidence that it mattersStill the main factor explaining labor laws in our data is legalorigin

This evidence echoes our earlier results on the regulation ofentry and on the formalism of judicial procedures Those findingsalso showed that countries from different legal origins rely ondifferent institutional technologies for social control of businessA key result in the present paper is the high correlation amongour measures of regulation of different activities across countriescountries that regulate entry also regulate labor markets andjudicial proceedings The bottom line of this research is the cen-trality of institutional transplantation countries have regulatory


styles that are pervasive across activities and shaped by theorigin of their laws

YALE UNIVERSITY

THE WORLD BANK

DARTMOUTH COLLEGE AND NATIONAL BUREAU OF ECONOMIC RESEARCH

YALE UNIVERSITY AND NATIONAL BUREAU OF ECONOMIC RESEARCH

HARVARD UNIVERSITY AND NATIONAL BUREAU OF ECONOMIC RESEARCH

REFERENCES

Alesina Alberto Arnaud Devleeschauwer William Easterly Sergio Kurlat andRomain Wacziarg ldquoFractionalizationrdquo Journal of Economic Growth VIII(2003) 155ndash194

Alesina Alberto and Edward Glaeser Fighting Poverty in the U S and EuropeA World of Difference (Oxford UK Oxford University Press 2004)

Alexander Robert ed Political Parties of the Americas Canada Latin Americaand the West Indies (Westport CT Greewood Press 1982)

Alvarez Michael Jose Cheibub Fernando Limongi and Adam PrzeworskildquoACLP Political and Economic Database Codebookrdquo in Democracy and De-velopment Political Institutions and Material Well-Being in the World 1950ndash1990 (Cambridge UK Cambridge University Press 2000)

Autor David ldquoOutsourcing at Will The Contribution of Unjust Dismissal Doc-trine to the Growth of Employment Outsourcingrdquo Journal of Labor Econom-ics XXI (2003) 1ndash42

Barro Robert and Jong-Wha Lee 2000 International Data on Educational At-tainment Updates and Implications httpwwwcidharvardeduciddataciddatahtml

Beck Thorsten George Clarke Alberto Groff Philip Keefer and Patrick WalshldquoNew Tools and New Tests in Comparative Political Economy The Databaseof Political Institutionsrdquo World Bank Economic Review XV (2001) 165ndash176

Becker Gary ldquoA Theory of Competition among Pressure Groups for PoliticalInfluencerdquo Quarterly Journal of Economics XCVIII (1983) 371ndash400

Bertola Giuseppe Tito Boeri and Sandrine Cazes ldquoEmployment Protection inIndustrialized Countries The Case for New Indicatorsrdquo International LabourReview CXXXIX (2000) 57ndash72

Besley Timothy and Robin Burgess ldquoCan Labor Regulation Hinder EconomicPerformance Evidence from Indiardquo Quarterly Journal of Economics CXIX(2003) 91ndash134

Blanchflower David and Richard Freeman eds Youth Employment and Job-lessness in Advanced Countries (Chicago IL University of Chicago Press forthe NBER 2000)

Blanpain Roger ed International Encyclopaedia for Labour Law and IndustrialRelations (The Hague The Netherlands Kluwer Law International 1977)

Buchanan James and Gordon Tullock The Calculus of Consent (Ann Arbor MIUniversity of Michigan Press 1962)

Cahoon Ben ed Statesmen database httpwwwworldstatesmenorgChidzero Anne-Marie ldquoSenegalrdquo in The Informal Sector and Microfinance Insti-

tutions in West Africa Leila Webster and Peter Fidler eds (Washington DCThe World Bank 1996)

Council of Foreign Relations Political Handbook of the World (New York NYMcGraw-Hill Book Co 1928ndash1960 and 1963ndash1970)

Constitution of the Portuguese Republic httponcampusrichmondedujjonesconfinderconsthtm

Cox Tim and R Jeffers eds International Handbook on Contracts of Employ-ment (The Hague The Netherlands Kluwer Law International 1988)

Cross-National Time-Series Data Archive httpwwwdatabankssitehostingnetDeakin Simon ldquoThe Contract of Employment A Study in Legal Evolutionrdquo ESRC


Centre for Business Research University of Cambridge Working Paper No203 2001

Demsetz Harold ldquoToward a Theory of Property Rightsrdquo American EconomicReview Papers and Proceedings LVII (1967) 347ndash359

Djankov Simeon Edward Glaeser Rafael La Porta Florencio Lopez-de-Silanes and Andrei Shleifer ldquoThe New Comparative Economicsrdquo Journalof Comparative Economics XXXI (2003a) 595ndash 619

Djankov Simeon Rafael La Porta Florencio Lopez-de-Silanes and Andrei Shlei-fer ldquoThe Regulation of Entryrdquo Quarterly Journal of Economics CXVII (2002)1ndash37

Djankov Simeon Rafael La Porta Florencio Lopez-de-Silanes and Andrei Shlei-fer ldquoCourtsrdquo Quarterly Journal of Economics CXVIII (2003b) 457ndash522

Emulate Me Country Reports History httpwwwcountryreportsorgEsping-Anderson Goslashsta The Three Worlds of Welfare Capitalism (Princeton NJ

Princeton University Press 1990)mdashmdash Social Foundations of Post-Industrial Economies (Oxford UK Oxford Uni-

versity Press 1999)Europa Publications Limited Europa Year-Book (London UK Europa Pub Co

Ltd 1960ndash1974)Finer Samuel The History of Government IndashIII (Cambridge UK Cambridge

University Press 1997)Fonseca Raquel Paloma Lopez-Garcia and Christopher Pissarides ldquoEntrepre-

neurship Start-up Costs and Employmentrdquo European Economic ReviewXLV (2000) 692ndash705

Forteza Alvaro and Martın Rama ldquoLabor Market lsquoRigidityrsquo and the Success ofEconomic Reforms Across More than One Hundred Countriesrdquo mimeoWorld Bank 2000

Frankel Jeffrey and David Romer ldquoDoes Trade Cause Growthrdquo American Eco-nomic Review LXXXIX (1999) 379ndash399

Freeman Richard and Remco Oostendorp ldquoThe Occupational Wages around theWorld Data Filerdquo International Labor Review CXL (2001) 379ndash402

Glaeser Edward Jose Scheinkman and Andrei Shleifer ldquoThe Injustice of In-equalityrdquo Journal of Monetary Economics Carnegie-Rochester Series on Pub-lic Policy L (2003) 199ndash222

Glaeser Edward and Andrei Shleifer ldquoLegal Originsrdquo Quarterly Journal ofEconomics CXVII (2002) 1193ndash1230

Glaeser Edward and Andrei Shleifer ldquoThe Rise of the Regulatory Staterdquo Journalof Economic Literature XLI (2003) 401ndash425

Heckman James and Carmen Pages-Serra ldquoThe Cost of Job Security RegulationEvidence from Latin American Labor Marketsrdquo Economia II (2000) 109ndash154

Hicks Alex Social Democracy and Welfare Capitalism (Ithaca NY Cornell Uni-versity Press 1999)

Ichniowski Casey Richard Freeman and Harrison Lauer ldquoCollective BargainingLaws Threat Effects and the Determination of Police Compensationrdquo Jour-nal of Labor Economics VII (1989) 191ndash209

International Labor Organization Key Indicators of the Labor Market (GenevaSwitzerland 1999)

mdashmdash Conditions of Work Digest (Geneva Switzerland 1994 and 1995)mdashmdash Laborsta httplaborstailoorgJaggers Keith and Monty Marshall Polity IV Project Dataset Center for Interna-

tional Development and Conflict Management University of Maryland 2000Kapiszewski Diana and Alexander Kazan eds Encyclopedia of Latin American

Politics (Westport CT Oryx Press 2002)Kaple Deborah ed World Encyclopedia of Political Systems and Parties (New

York NY Facts on File 1999)Kasnakoglu Zehra and Munur Yayla ldquoUnrecorded Economy in Turkey A

Monetary Approachrdquo in Tuncer Bulutay ed Informal Sector in Turkey I(Ankara Turkey SIS 1999)

Krueger Alan ldquoThe Evolution of Unjust-Dismissal Legislation in the UnitedStatesrdquo Industrial and Labor Relations Review XLIV (1991) 644ndash660

La Porta Rafael Florencio Lopez-de-Silanes and Andrei Shleifer ldquoWhat Worksin Securities Lawsrdquo mimeo Harvard University 2003


La Porta Rafael Florencio Lopez-de-Silanes Christian Pop-Eleches and AndreiShleifer ldquoJudicial Checks and Balancesrdquo Journal of Political Economy CXII(2004) 445ndash470

La Porta Rafael Florencio Lopez-de-Silanes Andrei Shleifer and Robert VishnyldquoLegal Determinants of External Financerdquo Journal of Finance LII (1997)1131ndash1150

La Porta Rafael Florencio Lopez-de-Silanes Andrei Shleifer and Robert VishnyldquoLaw and Financerdquo Journal of Political Economy CVI (1998) 1113ndash1155

La Porta Rafael Florencio Lopez-de-Silanes Andrei Shleifer and Robert VishnyldquoThe Quality of Governmentrdquo Journal of Law Economics and OrganizationXV (1999) 222ndash279

Lazear Edward ldquoJob Security Provisions and Employmentrdquo Quarterly Journal ofEconomics CV (1990) 699ndash726

Lewis D S and D J Sagar eds Political Parties of Asia and the Pacific AReference Guide (Essex UK Longman Current Affairs 1992)

Marx Karl Das Kapital (London UK Lawrence and Wishart 1974 [1872])Mchale Vincent and Sharon Skowronski eds Political Parties of Europe (West-

port CT Greenwood Press 1983)Mulligan Casey and Xavier Sala-i-Martin ldquoInternationally Common Features of

Public Old-Age Pensions and their Implications for Models of the PublicSectorrdquo Advances in Economic Analysis and Policy IV (2004) Article 4

Mulligan Casey and Andrei Shleifer ldquoPopulation and Regulationrdquo mimeo 2003Mulligan Casey and Andrei Shleifer ldquoConscription as Regulationrdquo American

Law and Economics Review 2005 forthcomingNicoletti Giuseppe and Frederic Pryor ldquoSubjective and Objective Measures of

the Extent of Governmental Regulationsrdquo mimeo OECD Economics Depart-ment 2001

Nicoletti Giuseppe Stefano Scarpetta and Olivier Boylaud ldquoSummary Indica-tors of Product Market Regulation with and Extension to Employment Pro-tection Legislationrdquo OECD Working Paper No 226 1999

North Douglass Growth and Structural Change in Economic History (New YorkNY Norton 1981)

Olson Mancur The Logic of Collective Action (Cambridge MA Harvard Univer-sity Press 1965)

mdashmdash ldquoDictatorship Democracy and Developmentrdquo American Political ScienceReview LXXXVII (1993) 567ndash576

Pagano Marco and Paolo Volpin ldquoThe Political Economy of Corporate Gover-nancerdquo CEPR Discussion Paper No 2682 2001

Posner Richard ldquoTheories of Economic Regulationrdquo Bell Journal of Economicsand Management Science V (1974) 335ndash358

Roe Mark ldquoPolitical Preconditions to Separating Ownership from CorporateControlrdquo Stanford Law Review LIII (2000) 539ndash606

Sananikone Ousa ldquoBurkina Fasordquo in Leila Webster and Peter Fidler eds TheInformal Sector and Microfinance Institutions in West Africa (WashingtonDC The World Bank 1996)

Schemmel B Rulers database httprulersorgSchneider Friedrich and Dominik Enste ldquoShadow Economies Size Causes and

Consequencesrdquo Journal of Economic Literature XXXVIII (2000) 77ndash114Stigler George ldquoThe Theory of Economic Regulationrdquo Bell Journal of Economics

and Management Science II (1971) 3ndash21Turnham David Bernard Salome and Antoine Schwartz The Informal Sector

Revisited (Paris France OECD 1990)United Nations Human Development Report (New York NY Oxford University

Press 1994 1997)United Nations Human Settlements Programme Global Urban Indicator Data-

base 2000 httpwwwunhsporgprogrammesguoU S Social Security Administration Social Security Programs Throughout the

World (Washington DC SSA 1999) httpwwwssagovWorld Bank World Development Indicators (Washington DC The World Bank

2001)Zweigert Konrad and Hein Kotz Introduction to Comparative Law (Oxford UK

Oxford University Press 3rd revised edition 1998)


have a significant impact on the quality of life such as old agedisability death sickness and unemployment

In this paper we examine these laws in 85 countries throughthe lens of three major theories of institutional choice the effi-ciency theory the political power theory and the legal theoryThe efficiency theory holds that institutions adjust to serve theneeds of a society most efficiently Each society chooses a systemof social control of business that optimally combines marketforces dispute resolution in court government regulation andcorrective taxes and subsidies [Djankov et al 2003a] Under thepolitical power theory institutions are shaped by those in powerto benefit themselves at the expense of those out of power Bothvoting and interest group politics allow the winners to benefit atthe expense of the losers with checks and balances on the gov-ernment limiting the extent of redistribution Under the legaltheory a countryrsquos approach to regulation is shaped by its legaltradition Most countries in the world have inherited their basiclegal structures from their colonizers such as the English theFrench the Germans the Portuguese or the Spanish or theirconquerors such as Napoleon or the Soviets The laws of thedifferent colonizers and occupiers belong to different legal tradi-tions which significantly influenced the legal systems of con-quered countries [Zweigert and Kotz 1998 La Porta et al 19971998] In broad terms common and civil law traditions utilizedifferent strategies for dealing with market failure the formerrelying on contract and private litigation the latter on directsupervision of markets by the government Under this theory thehistorical origin of a countryrsquos laws shapes its regulation of laborand other markets1

Our focus on labor laws might be particularly helpful indistinguishing political power and legal theories Roe [2000] andPagano and Volpin [2001] argue that the political power of laborhas been central to legal and regulatory design of the twentiethcentury Using data on OECD countries these authors challengethe observation of La Porta et al [1997 1998] that the differencesin financial development among common and civil law countriesare best understood in terms of legal theories Roe [2000] main-tains that civil law is simply a proxy for social democracy An

1 In footnotes we also consider the cultural theory under which regulationsare shaped by a countryrsquos cultural history such as the dominance of particularreligious groups The data do not support this theory so we keep its discussion toa minimum








II HYPOTHESES

IIA Background



IIB Efficiency





IIC Political Power






IID Legal Theory
























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VII OUTCOMES






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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES






















































































II HYPOTHESES

IIA Background



IIB Efficiency





IIC Political Power






IID Legal Theory
























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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































II HYPOTHESES

IIA Background



IIB Efficiency





IIC Political Power






IID Legal Theory
























TA

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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES


















































































IIC Political Power






IID Legal Theory
























TA

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TA

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1975

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES


















































































IID Legal Theory
























TA

BL

EI

TH

EV

AR

IAB

LE

ST

his

tabl

epr

esen

tsbr

ief

defi

nit

ion

sof

the

vari

able

su

sed

inth

epa

per

For

afu

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ptio

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all

vari

able

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p

iic

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ale

edu

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less

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ise

spec

ified

th

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are

the

law

sof

each

cou

ntr

yW

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lied

onse

con

dary

sou

rces

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nfi

rmou

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ta

incl

udi

ng

the

Inte

rnat

ion

alE

ncy

clop

edia

for

Lab

orL

awan

dIn

du

stri

alR

elat

ion

s[B

lan

pain

1977

]th

eIn

tern

atio

nal

Han

dbo

okon

Con

trac

tsof

Em

ploy

men

t[C

oxan

dJe

ffer

s19

88]

the

ILO

rsquosC

ond

itio

ns

ofW

ork

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est

[199

419

95]

and

the

U

S

Soc

ial

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uri

tyA

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istr

atio

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ial

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uri

tyP

rogr

ams

Th

rou

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orld

[199

9]

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less

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spec

ified

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igh

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indi

cate

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her

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prot

ecti

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een

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ple

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iabl

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pute

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ual

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fixed

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pute

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prot

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law

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anda

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colle

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reem

ents

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dism

issa

lIt

isth

eav

erag

eof

the

follo

win

gse

ven

dum

my

vari

able

sw

hich

equa

lon

e(1

)if

the

empl

oyer

mus

tno

tify

ath

ird

part

ybe

fore

dism

issi

ngm

ore

than

one

wor

ker

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ifth

eem

ploy

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appr

oval

ofa

thir

dpa

rty

prio

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issi

ngm

ore

than

one

wor

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(3)

ifth

eem

ploy

erm

ust

noti

fya

thir

dpa

rty

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redi

smis

sing

one

redu

ndan

tw

orke

r(4

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empl

oyer

need

sth

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prov

alof

ath

ird

part

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dism

iss

one

redu

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orke

r(5

)if

the

empl

oyer

mus

tpr

ovid

ere

loca

tion

orre

trai

ning

alte

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ives

for

redu

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tem

ploy

ees

prio

rto

dism

issa

l(6

)if

ther

ear

epr

iori

tyru

les

appl

ying

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smis

sal

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san

d(7

)if

ther

ear

epr

iori

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les

appl

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tore

empl

oym

ent

Em

ploy

men

tla

ws

inde

xM

easu

res

the

prot

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onof

labo

ran

dem

ploy

men

tla

ws

asth

eav

erag

eof

(1)

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erna

tive

empl

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ent

cont

ract

s(2

)C

ost

ofin

crea

sing

hour

sw

orke

d(3

)C

ost

offir

ing

wor

kers

and

(4)

Dis

mis

sal

proc

edur

es


Col

lect

ive

rela

tion

sla

ws

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orun

ion

pow

erM

easu

res

the

stat

utor

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tion

and

pow

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unio

nsas

the

aver

age

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efo

llow

ing

seve

ndu

mm

yva

riab

les

whi

cheq

ual

one

(1)

ifem

ploy

ees

have

the

righ

tto

unio

nize

(2)

ifem

ploy

ees

have

the

righ

tto

colle

ctiv

eba

rgai

ning

(3)

ifem

ploy

ees

have

the

lega

ldu

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ain

wit

hun

ions

(4)

ifco

llect

ive

cont

ract

sar

eex

tend

edto

thir

dpa

rtie

sby

law

(5)

ifth

ela

wal

low

scl

osed

shop

s(6

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wor

kers

or

unio

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thha

vea

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appo

int

mem

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Dir

ecto

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kers

rsquocou

ncils

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man

date

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olle

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kers

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llect

ive

disp

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asth

eav

erag

eof

the

follo

win

gei

ght

dum

my

vari

able

sw

hich

equa

lon

e(1

)if

empl

oyer

lock

outs

are

illeg

al(

2)if

wor

kers

have

the

righ

tto

indu

stri

alac

tion

(3)

ifw

ildca

tpo

litic

ala

ndsy

mpa

thy

solid

arit

yse

cond

ary

stri

kes

are

lega

l(4

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ther

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nom

anda

tory

wai

ting

peri

odor

noti

ficat

ion

requ

irem

ent

befo

rest

rike

sca

noc

cur

(5)

ifst

riki

ngis

lega

lev

enif

ther

eis

aco

llect

ive

agre

emen

tin

forc

e(6

)if

law

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not

man

date

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iliat

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proc

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fore

ast

rike

(7)

ifth

ird-

part

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ring

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disp

ute

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anda

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est

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Col

lect

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rela

tion

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ws

inde

xM

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res

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prot

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colle

ctiv

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ons

law

sas

the

aver

age

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abor

unio

npo

wer

and

(2)

Col

lect

ive

disp

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Soc

ial

secu

rity

law

s

Old

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di

sabi

lity

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deat

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s

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ancy

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norm

alre

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cted

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tage

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ent

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net

old-

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cash

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Sic

knes

san

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alth

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fits

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sure

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alth

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the

aver

age

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four

norm

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the

num

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ribu

tion

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empl

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ent

requ

ired

toqu

alif

yfo

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nefit

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law

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perc

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lary

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cted

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cove

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ckne

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dhe

alth

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fits

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peri

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ckne

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nefit

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s


TA

BL

EI

(CO

NT

INU

ED

)

Var

iabl

eD

escr

ipti

on

Pol

itic

alva

riab

les

Chi

efex

ecut

ive

and

larg

est

part

yin

cong

ress

have

left

orce

nter

poli

tica

lor

ient

atio

n

Mea

sure

sth

epe

rcen

tage

ofye

ars

betw

een

1928

and

1995

and

alt

erna

tive

lyb

etw

een

1975

and

1995

dur

ing

whi

chbo

thth

epa

rty

ofth

ech

ief

exec

utiv

ean

dth

ela

rges

tpa

rty

inco

ngre

ssha

dle

ftor

cent

eror

ient

atio

nIf

the

coun

try

was

not

inde

pend

ent

inth

ein

itia

lye

arof

the

peri

odw

eus

eth

ein

depe

nden

ceye

aras

the

first

peri

odF

orco

untr

ies

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wer

epa

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ala

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try

inth

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itia

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arof

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uent

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upw

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clud

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calc

ulat

ions

the

polit

ical

orie

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mot

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ook

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VII OUTCOMES






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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES



































































































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VII OUTCOMES






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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES





























































































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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES






















































































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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































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lawsindex

Socialsecurity

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LogGNPper

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Collectiverelations

lawsindex

Socialsecurity

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LogGNPper

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Chiefexecutive















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60a

66h

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left

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tion

1928

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012

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left

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1975

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1975

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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































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Collectiverelations

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LogGNPper

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

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Chiefexecutive















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1928

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ief

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a0

1542

b0

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66h

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left

orce

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liti

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tion

1975

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1975

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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ares

regr

essi

ons

ofth

ecr

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ion

ofco

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trie

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obu

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anda

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are

show

nin

pare

nth

eses

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llth

eva

riab

les

are

desc

ribe

din

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leI

and

the

data

can

befo

un

din

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pi

icg

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yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

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1990

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1991

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year

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































Ou

tcom

es

Siz

eof

the

unof

ficia

lec

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Siz

eof

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Ens

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San

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Chi

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o[1

996]

for

Sen

egal

Tur

nham

etal

[19

90]

for

Indo

nesi

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tan

and

Kas

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glu

and

Yay

la[1

999]

for

Tur

key

Em

ploy

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the

unof

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

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Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















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0189

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12b

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3585

(00

149)

(00

693)

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419)

[00

8]0

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(00

141)

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553)

(01

295)

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2]

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019

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107

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0

0055

018

92b

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54a

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015

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111

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06]


Col

lect

ive

rela

tion

sla

ws

inde

x0

0130

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510

3039

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(00

101)

(00

459)

(00

941)

[00

3]0

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c0

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b0

2669

a85

(00

093)

(00

342)

(00

810)

[00

7]

000

020

1091

c0

4177

a70

(00

110)

(00

643)

(00

862)

[00

4]0

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c0

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018

7570

(00

131)

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404)

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266)

[00

5]

001

240

1436

a0

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(00

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386)

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719)

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6]

000

010

1052

c0

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(00

105)

(00

583)

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748)

[00

4]

Soc

ial

secu

rity

law

sin

dex

011

30a

023

11a

0

4680

a85

(00

108)

(00

582)

(01

068)

[05

0]0

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102

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50]

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43]

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107

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02a

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098

1)(0

101

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a

sign

ifica

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si

gnifi

can

tat

5pe

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sign

ifica

nt

at10

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ent

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l
















TA

BL

EV

IR

EG

UL

AT

ION

OF

LA

BO

R

PO

LIT

ICA

LV

AR

IAB

LE

S

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofn

onso

cial

ist

cou

ntr

ies

Th

en

inet

een

cou

ntr

ies

excl

ude

dfr

omth

ista

ble

are

Arm

enia

B

ulg

aria

C

hin

aC

roat

ia

Cze

chR

epu

blic

G

eorg

ia

Hu

nga

ry

Kaz

akh

stan

K

yrgy

zR

epu

blic

L

atvi

aL

ith

uan

ia

Mon

goli

aP

olan

dR

oman

ia

Ru

ssia

nF

eder

atio

n

Slo

vak

Rep

ubl

ic

Slo

ven

ia

Ukr

ain

ean

dV

ietn

am

Th

ede

pen

den

tva

riab

les

are

(1)

the

empl

oym

ent

law

sin

dex

(in

Pan

elA

)(2

)th

eco

llec

tive

rela

tion

sla

ws

inde

x(i

nP

anel

B)

and

(3)

the

soci

alse

curi

tyin

dex

(in

Pan

elC

)R

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Lef

tpo

wer

vari

able

sL

ogG

NP

per

capi

taL

eft

pow

erva

riab

les

Fre

nch

lega

lor

igin

Ger

man

lega

lor

igin

Sca

ndi

nav

ian

lega

lor

igin

Con

stan

tN

[R2]

Pan

elA

T

he

dep

end

ent

vari

able

isth

eem

ploy

men

tla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

340

0711

025

21a

016

31b

035

75a

023

60a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1928

ndash199

5(0

012

4)(0

065

6)(0

037

7)(0

069

5)(0

056

1)(0

117

8)[0

46]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

900

1196

b0

2525

a0

1542

b0

3395

a0

1729

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

012

1)(0

055

4)(0

036

8)(0

069

4)(0

050

2)(0

111

8)[0

49]

Un

ion

den

sity

0

0066

008

270

2283

a0

1422

b0

3318

a0

3513

b57

(00

156)

(01

109)

(00

408)

(00

690)

(00

689)

(01

354)

[04

3]

Pan

elB

T

he

dep

end

ent

vari

able

isth

eco

llec

tive

rela

tion

sla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

790

0384

016

17a

013

80b

012

120

2512

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

093)

(00

495)

(00

302)

(00

601)

(00

760)

(00

914)

[03

3]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

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hav

ele

ftor

cen

ter

poli

tica

lor

ien

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on19

28ndash1

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(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

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230)

[07

2]

Ch

ief

exec

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vean

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012

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280

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5675

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ele

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cen

ter

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tica

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75ndash1

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(00

122)

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604)

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400)

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535)

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1]

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010

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TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

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ism

inde

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tion

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(nu

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step

sto

star

ta

busi

nes

s)

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days

tost

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abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

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4894

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Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

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inde

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rth

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onof

an

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gte

nan

t0

3292

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5134

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1283

Cou

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nes

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per

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220

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gnifi

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ent

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l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

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366

5)(7

007

0)(4

494

1)[0

31]

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2c42

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a85

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(96

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3]

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68a

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273

0)(3

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31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

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193)

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476

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008)

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42]

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9765

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985

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7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

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0

7144

a

618

70a

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78(0

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9)(1

814

8)(1

427

4)[0

30]

0

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a

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94a

923

725a

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146

8)(2

526

9)(1

501

5)[0

31]

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4918

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429

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893

289a

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177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

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163)

(10

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850

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02]

0

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118

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996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

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049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

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(02

511)

(28

478)

(29

019)

[01

1]

038

643

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240

2)(3

827

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062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

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550

9)[0

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0

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372b

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437

2)(6

677

5)(5

109

6)[0

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0

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683

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265c

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4)(1

023

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4]

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20ndash2

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old

acti

vefe

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ndash24

year

sol

d19

91ndash2

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1

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b18

014

6a23

559

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(07

247)

(65

874)

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256)

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1]

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88b

874

9329

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(07

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076

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[01

4]

236

58a

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964

287

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875

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esof

mac

hin

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erat

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wag

esof

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ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

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150

2202

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perc

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sign

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nt

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perc

ent

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l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EI

(CO

NT

INU

ED

)

Var

iabl

eD

escr

ipti

on

Oth

erva

riab

les

Log

ofG

NP

per

capi

taN

atur

allo

gari

thm

ofG

NP

per

capi

tain

1997

Atl

asm

etho

dex

pres

sed

incu

rren

tU

Sdo

llars

Sou

rce

Wor

ldB

ank

Wor

ldD

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Indi

cato

rs[2

001]

L

egal

orig

inId

enti

fies

the

lega

lor

igin

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nyla

wor

com

mer

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nglis

hF

renc

hS

ocia

list

Ger

man

or

Sca

ndin

avia

n)

Sou

rce

La

Por

taet

al[

1999

]C

ourt

form

alis

min

dex

for

the

evic

tion

ofa

nonp

ayin

gte

nant

The

inde

xm

easu

res

subs

tant

ive

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proc

edur

alst

atut

ory

inte

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tion

inju

dici

alca

ses

atlo

wer

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vil

tria

lco

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ina

case

for

evic

ting

ate

nant

who

has

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paid

rent

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her

valu

esre

pres

ent

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est

atut

ory

cont

rol

orin

terv

enti

onin

the

judi

cial

proc

ess

Sou

rce

Dja

nkov

etal

[20

03a]

Cou

rtfo

rmal

ism

inde

xfo

rth

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llec

tion

ofa

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ced

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k

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Hig

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pres

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est

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cont

rol

orin

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enti

onin

the

judi

cial

proc

ess

Sou

rce

Dja

nkov

etal

[20

03a]

Log

num

ber

ofst

eps

tost

art

abu

sine

ss

Nat

ural

loga

rith

mof

the

num

ber

ofdi

ffer

ent

proc

edur

esth

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star

t-up

busi

ness

has

toco

mpl

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ith

toob

tain

ale

gal

stat

usi

e

tost

art

oper

atin

gas

ale

gal

enti

tyS

ourc

eD

jank

ovet

al[

2002

]

Log

num

ber

ofda

ysto

star

ta

busi

ness

Nat

ural

loga

rith

mof

the

num

ber

ofda

ysre

quir

edto

obta

inle

gal

stat

usto

oper

ate

afir

min

1999

Sou

rce

Dja

nkov

etal

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lawsindex

Socialsecurity

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tion

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ws

ind

ex

Ch

ief

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uti

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inco

ngr

ess

000

790

0384

016

17a

013

80b

012

120

2512

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

093)

(00

495)

(00

302)

(00

601)

(00

760)

(00

914)

[03

3]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

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012

14a

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280

1146

a0

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52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

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1]

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ion

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sity

010

61a

0

0674

008

06c

002

320

1506

b

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012

7)(0

111

1)(0

044

5)(0

053

9)(0

073

0)(0

109

0)[0

63]

a

sign

ifica

nt

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ent

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lb

si

gnifi

can

tat

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ifica

nt

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ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

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ism

inde

xfo

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eco

llec

tion

ofa

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nce

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eck

Log

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mbe

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sto

star

ta

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nes

s)

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abu

sin

ess)

Col

lect

ive

rela

tion

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ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

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75b

Cou

rtfo

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ism

inde

xfo

rth

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onof

an

onpa

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gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

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ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

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75a

Log

(nu

mbe

rof

days

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sin

ess)

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35a

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a0

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nes

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per

capi

ta)

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220

1721

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3667

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a

sign

ifica

nt

at1

perc

ent

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lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

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366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

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3]

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68a

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500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

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193)

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7934

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375

1)[0

37]

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a33

476

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(07

008)

(14

1319

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879

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42]

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9765

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625

621a

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985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

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725a

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146

8)(2

526

9)(1

501

5)[0

31]

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4918

a

429

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289a

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177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

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(07

163)

(10

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02]

0

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118

962

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(07

677)

(14

6474

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996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

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643

6447

101

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240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

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372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

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683

117

265c

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519

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023

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4]

Un

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oyed

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ales

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old

acti

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sol

d19

91ndash2

000

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256)

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1]

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552)

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6417

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076

92)

[01

4]

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58a

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964

287

286a

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875

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1868

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14]

Wag

esof

mac

hin

eop

erat

ors

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esof

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ksan

dcr

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and

rela

ted

trad

esw

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90ndash1

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5]

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sign

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nt

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perc

ent

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gnifi

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tat

5pe

rcen

tle

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c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES













































































































IIID Aggregation







TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

DS

UB

IND

ICE

S

Th

ista

ble

pres

ents

pair

wis

eco

rrel

atio

ns

betw

een

our

vari

ous

mea

sure

sof

regu

lati

onof

labo

rA

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

Em

plo

ymen

tla

ws

ind

ex

Alt

erna

tive

empl

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ent

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ract

s

Cos

tsof

incr

easi

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urs

wor

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Cos

tof

firin

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rsD

ism

issa

lpr

oced

ures

Col

lect

ive

rela

tion

sla

ws

ind

ex

Lab

orun

ion

pow

erC

olle

ctiv

edi

sput

es

Soc

ial

secu

rity

law

sin

dex

Old

-age

di

sabi

lity

and

deat

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Sic

knes

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alth

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

EIV

RE

GU

LA

TIO

NO

FL

AB

OR

AN

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OR

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Ord

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The

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the

empl

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Pan

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repe

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50ndash1

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aver

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das

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Pan

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VII OUTCOMES






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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES






































































































IIID Aggregation







TA

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Collectiverelations

lawsindex

Socialsecurity

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66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

14a

009

280

1146

a0

0307

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52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

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(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

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1]

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ion

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sity

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61a

0

0674

008

06c

002

320

1506

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012

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111

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073

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63]

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sign

ifica

nt

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ent

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si

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ifica

nt

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ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

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ism

inde

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onof

an

onpa

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gte

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t

Cou

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ism

inde

xfo

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llec

tion

ofa

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nce

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Log

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ta

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nes

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sin

ess)

Col

lect

ive

rela

tion

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inde

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4894

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Soc

ial

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rity

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sin

dex

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39b

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75b

Cou

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ism

inde

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an

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gte

nan

t0

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5134

a0

1283

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inde

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llec

tion

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eck

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30a

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480

8506

a

Log

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mbe

rof

step

sto

star

ta

busi

nes

s)0

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per

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ta)

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ifica

nt

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si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

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perc

ent

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l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

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366

5)(7

007

0)(4

494

1)[0

31]

2

8685

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369

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(96

501)

(50

447)

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3]

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500

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273

0)(3

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0)[0

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Em

ploy

men

tin

the

un

offi

cial

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3

7368

a

528

1165

553

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193)

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375

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42]

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621a

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985

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043

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112)

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7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

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618

70a

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814

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146

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501

5)[0

31]

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177

4)(2

341

5)(1

118

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26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

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4

028

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413

652

776

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(07

163)

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)(6

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02]

0

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118

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677)

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6474

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996

7)[0

01]

014

50

759

0259

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3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

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7263

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(02

511)

(28

478)

(29

019)

[01

1]

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643

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240

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827

9)(3

062

2)[0

06]

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253

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539

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Un

empl

oyed

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es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

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432

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550

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13]

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677

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109

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683

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265c

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4]

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esof

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nt

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tle

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c

sign

ifica

nt

at10

perc

ent

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l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
































































































IIID Aggregation







TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

DS

UB

IND

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Th

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pres

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pair

wis

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betw

een

our

vari

ous

mea

sure

sof

regu

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onof

labo

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les

are

desc

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din

Tab

leI

Em

plo

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Cos

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issa

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Col

lect

ive

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ind

ex

Lab

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erC

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edi

sput

es

Soc

ial

secu

rity

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sin

dex

Old

-age

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

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GU

LA

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OR

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Ord

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aver

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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ares

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ofth

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din

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ende

nt

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sin

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tion

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inde

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1990

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1991

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES























































































IIID Aggregation







TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

DS

UB

IND

ICE

S

Th

ista

ble

pres

ents

pair

wis

eco

rrel

atio

ns

betw

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

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rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

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ele

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cen

ter

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tica

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ien

tati

on19

28ndash1

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122)

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657)

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399)

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546)

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481)

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230)

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2]

Ch

ief

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ter

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122)

(00

604)

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535)

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1]

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ion

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sity

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sign

ifica

nt

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ent

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ifica

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ent

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l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

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bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

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rtfo

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onof

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onpa

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Cou

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tion

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ess)

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lect

ive

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tion

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rity

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dex

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Log

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star

ta

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nes

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per

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ifica

nt

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si

gnifi

can

tat

5pe

rcen

tle

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c

sign

ifica

nt

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perc

ent

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l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

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un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

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inde

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onst

ant

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2]

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eof

the

un

offi

cial

econ

omy

2

8030

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007

0)(4

494

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3]

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ploy

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tin

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3

7368

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7]

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bor

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e19

90ndash1

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1990

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509)

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Un

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oym

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1991

ndash200

0

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305

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478)

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1]

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ndash24

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dac

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year

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d19

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000

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1]

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[01

4]

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Wag

esof

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hin

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ted

trad

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nt

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perc

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tle

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sign

ifica

nt

at10

perc

ent

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l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































IIID Aggregation







TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

DS

UB

IND

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Th

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pair

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betw

een

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vari

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mea

sure

sof

regu

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onof

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Tab

leI

Em

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Col

lect

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ex

Lab

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erC

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es

Soc

ial

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rity

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sin

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Old

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

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Ord

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aver

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empl

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ent

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sin

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)(2

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eco

llec

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sla

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tion

1928

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012

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1542

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left

orce

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tion

1975

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1975

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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ares

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essi

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ofth

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are

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nin

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nth

eses

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llth

eva

riab

les

are

desc

ribe

din

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leI

and

the

data

can

befo

un

din

htt

pi

icg

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yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

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ent

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sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

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inde

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2]

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1990

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1991

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year

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EII

CO

RR

EL

AT

ION

BE

TW

EE

NIN

DIC

ES

AN

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UB

IND

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Th

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Em

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rsD

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ures

Col

lect

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ws

ind

ex

Lab

orun

ion

pow

erC

olle

ctiv

edi

sput

es

Soc

ial

secu

rity

law

sin

dex

Old

-age

di

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Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















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(00

122)

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604)

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400)

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535)

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1]

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TA

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EV

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OR

RE

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BE

TW

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NR

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UL

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ION

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ICE

S

Th

eta

ble

show

spa

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ise

corr

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sbe

twee

nva

riou

sin

dice

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ion

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cou

ntr

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able

sar

ede

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bed

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able

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Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

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ws

inde

x

Soc

ial

secu

rity

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sin

dex

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rtfo

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ism

inde

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rth

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onof

an

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t

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lect

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per

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can

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sign

ifica

nt

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perc

ent

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l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

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3]

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Em

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e19

90ndash1

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Fem

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1990

ndash199

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01]

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759

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Un

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ent

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1991

ndash200

0

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1]

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Un

empl

oyed

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es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

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4]

Un

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old

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sol

d19

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5pe

rcen

tle

vel

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sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES





































































































Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

EIV

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GU

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TIO

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OR

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Ord

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50ndash1

995

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1928

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orce

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tion

1975

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1975

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

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inar

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ende

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sin

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1991

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES































































































Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES

























































































Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















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TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

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ecr

oss

sect

ion

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cou

ntr

ies

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the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

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ism

inde

xfo

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eco

llec

tion

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eck

Log

(nu

mbe

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sto

star

ta

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nes

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(nu

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sin

ess)

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lect

ive

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tion

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ws

inde

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4894

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rity

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sin

dex

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39b

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ism

inde

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tion

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eck

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03a

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star

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(nu

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ta

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nes

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per

capi

ta)

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220

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ifica

nt

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si

gnifi

can

tat

5pe

rcen

tle

vel

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sign

ifica

nt

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perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

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366

5)(7

007

0)(4

494

1)[0

31]

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(96

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3]

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Em

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the

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7368

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31]

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177

4)(2

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Fem

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atio

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1990

ndash199

4

028

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118

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01]

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50

759

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Un

empl

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ent

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1991

ndash200

0

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305

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(02

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478)

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1]

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Un

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oyed

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ndash24

year

sol

dac

tive

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ndash24

year

sol

d19

91ndash2

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4]

Un

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nt

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5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES



















































































Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive


have left orcenter








Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

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OR

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Ord

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0]0

1115

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1962

a

043

29a

85(0

010

4)(0

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102

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50]

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0

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114

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43]

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2027

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194

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008

46a

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72b

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013

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054

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107

6)[0

41]

009

02a

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019

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098

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a

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ifica

nt

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ifica

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ent

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TA

BL

EV

IR

EG

UL

AT

ION

OF

LA

BO

R

PO

LIT

ICA

LV

AR

IAB

LE

S

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofn

onso

cial

ist

cou

ntr

ies

Th

en

inet

een

cou

ntr

ies

excl

ude

dfr

omth

ista

ble

are

Arm

enia

B

ulg

aria

C

hin

aC

roat

ia

Cze

chR

epu

blic

G

eorg

ia

Hu

nga

ry

Kaz

akh

stan

K

yrgy

zR

epu

blic

L

atvi

aL

ith

uan

ia

Mon

goli

aP

olan

dR

oman

ia

Ru

ssia

nF

eder

atio

n

Slo

vak

Rep

ubl

ic

Slo

ven

ia

Ukr

ain

ean

dV

ietn

am

Th

ede

pen

den

tva

riab

les

are

(1)

the

empl

oym

ent

law

sin

dex

(in

Pan

elA

)(2

)th

eco

llec

tive

rela

tion

sla

ws

inde

x(i

nP

anel

B)

and

(3)

the

soci

alse

curi

tyin

dex

(in

Pan

elC

)R

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Lef

tpo

wer

vari

able

sL

ogG

NP

per

capi

taL

eft

pow

erva

riab

les

Fre

nch

lega

lor

igin

Ger

man

lega

lor

igin

Sca

ndi

nav

ian

lega

lor

igin

Con

stan

tN

[R2]

Pan

elA

T

he

dep

end

ent

vari

able

isth

eem

ploy

men

tla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

340

0711

025

21a

016

31b

035

75a

023

60a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1928

ndash199

5(0

012

4)(0

065

6)(0

037

7)(0

069

5)(0

056

1)(0

117

8)[0

46]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

900

1196

b0

2525

a0

1542

b0

3395

a0

1729

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

012

1)(0

055

4)(0

036

8)(0

069

4)(0

050

2)(0

111

8)[0

49]

Un

ion

den

sity

0

0066

008

270

2283

a0

1422

b0

3318

a0

3513

b57

(00

156)

(01

109)

(00

408)

(00

690)

(00

689)

(01

354)

[04

3]

Pan

elB

T

he

dep

end

ent

vari

able

isth

eco

llec

tive

rela

tion

sla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

790

0384

016

17a

013

80b

012

120

2512

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

093)

(00

495)

(00

302)

(00

601)

(00

760)

(00

914)

[03

3]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

14a

009

280

1146

a0

0307

008

52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

[07

1]

Un

ion

den

sity

010

61a

0

0674

008

06c

002

320

1506

b

035

82a

57(0

012

7)(0

111

1)(0

044

5)(0

053

9)(0

073

0)(0

109

0)[0

63]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

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c

sign

ifica

nt

at10

perc

ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

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nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

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75a

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

033

35a

036

63a

0

2949

a0

5274

a0

5525

a0

8263

a

Log

(cos

tto

star

ta

busi

nes

sG

DP

per

capi

ta)

017

220

1721

0

4737

a0

3667

a0

4309

a0

6354

a0

6147

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

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(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

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94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

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4]

Un

empl

oyed

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ales

20ndash2

4ye

ars

old

acti

vefe

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es20

ndash24

year

sol

d19

91ndash2

000

1

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b18

014

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(07

247)

(65

874)

(76

256)

[02

1]

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88b

874

9329

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7a52

(07

552)

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6417

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076

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[01

4]

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58a

127

964

287

286a

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875

4)(1

693

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1868

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14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

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ksan

dcr

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and

rela

ted

trad

esw

orke

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90ndash1

999

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150

2202

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007

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152

0)(0

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105

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perc

ent

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES



















































































Median 05007 04554 07154 96382 04000



Median 05205 04732 07063 72442 08824







Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















TA

BL

EIV

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squa

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regr

essi

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ofth

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oss

sect

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untr

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The

depe

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are

(1)

the

empl

oym

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law

sin

dex

and

its

com

pone

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(2)

the

colle

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its

com

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anel

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(3)

the

soci

alse

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inde

xan

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Pan

elC

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Pan

elD

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repe

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sion

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aggr

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50ndash1

995

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50ndash1

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Pan

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orig

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VII OUTCOMES






TA

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES





















































































Collectiverelations

lawsindex

Socialsecurity

lawsindex

LogGNPper

capita1997

Chiefexecutive















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TA

BL

EV

IIC

OR

RE

LA

TIO

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BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

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ism

inde

xfo

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tion

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nce

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Log

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mbe

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sto

star

ta

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nes

s)

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(nu

mbe

rof

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art

abu

sin

ess)

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lect

ive

rela

tion

sla

ws

inde

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4894

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Soc

ial

secu

rity

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sin

dex

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39b

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3292

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tion

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sto

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nes

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per

capi

ta)

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220

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ifica

nt

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ent

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lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

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366

5)(7

007

0)(4

494

1)[0

31]

2

8685

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126

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369

a85

(03

763)

(96

501)

(50

447)

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3]

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68a

8

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521

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500

9)(7

273

0)(3

465

0)[0

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Em

ploy

men

tin

the

un

offi

cial

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omy

3

7368

a

528

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7]

Mal

epa

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inla

bor

forc

e19

90ndash1

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0

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814

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725a

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146

8)(2

526

9)(1

501

5)[0

31]

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429

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289a

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177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

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atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

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776

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(07

163)

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0358

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850

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02]

0

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118

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699

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01]

014

50

759

0259

229

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509)

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8392

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01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

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(02

511)

(28

478)

(29

019)

[01

1]

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643

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240

2)(3

827

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062

2)[0

06]

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5299

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762a

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253

6)(3

539

7)(2

557

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06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

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146

331a

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78c

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432

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458

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550

9)[0

13]

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372b

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4]

Un

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20ndash2

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old

acti

vefe

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es20

ndash24

year

sol

d19

91ndash2

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1]

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4]

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58a

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Wag

esof

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esof

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ted

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105

6)[0

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5]

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nt

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perc

ent

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gnifi

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tat

5pe

rcen

tle

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c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES





















































































TA

BL

EIV

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DL

EG

AL

OR

IGIN

Ord

inar

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The

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(1)

the

empl

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Pan

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Pan

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The

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si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l
















TA

BL

EV

IR

EG

UL

AT

ION

OF

LA

BO

R

PO

LIT

ICA

LV

AR

IAB

LE

S

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofn

onso

cial

ist

cou

ntr

ies

Th

en

inet

een

cou

ntr

ies

excl

ude

dfr

omth

ista

ble

are

Arm

enia

B

ulg

aria

C

hin

aC

roat

ia

Cze

chR

epu

blic

G

eorg

ia

Hu

nga

ry

Kaz

akh

stan

K

yrgy

zR

epu

blic

L

atvi

aL

ith

uan

ia

Mon

goli

aP

olan

dR

oman

ia

Ru

ssia

nF

eder

atio

n

Slo

vak

Rep

ubl

ic

Slo

ven

ia

Ukr

ain

ean

dV

ietn

am

Th

ede

pen

den

tva

riab

les

are

(1)

the

empl

oym

ent

law

sin

dex

(in

Pan

elA

)(2

)th

eco

llec

tive

rela

tion

sla

ws

inde

x(i

nP

anel

B)

and

(3)

the

soci

alse

curi

tyin

dex

(in

Pan

elC

)R

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Lef

tpo

wer

vari

able

sL

ogG

NP

per

capi

taL

eft

pow

erva

riab

les

Fre

nch

lega

lor

igin

Ger

man

lega

lor

igin

Sca

ndi

nav

ian

lega

lor

igin

Con

stan

tN

[R2]

Pan

elA

T

he

dep

end

ent

vari

able

isth

eem

ploy

men

tla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

340

0711

025

21a

016

31b

035

75a

023

60a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1928

ndash199

5(0

012

4)(0

065

6)(0

037

7)(0

069

5)(0

056

1)(0

117

8)[0

46]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

900

1196

b0

2525

a0

1542

b0

3395

a0

1729

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

012

1)(0

055

4)(0

036

8)(0

069

4)(0

050

2)(0

111

8)[0

49]

Un

ion

den

sity

0

0066

008

270

2283

a0

1422

b0

3318

a0

3513

b57

(00

156)

(01

109)

(00

408)

(00

690)

(00

689)

(01

354)

[04

3]

Pan

elB

T

he

dep

end

ent

vari

able

isth

eco

llec

tive

rela

tion

sla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

790

0384

016

17a

013

80b

012

120

2512

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

093)

(00

495)

(00

302)

(00

601)

(00

760)

(00

914)

[03

3]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

14a

009

280

1146

a0

0307

008

52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

[07

1]

Un

ion

den

sity

010

61a

0

0674

008

06c

002

320

1506

b

035

82a

57(0

012

7)(0

111

1)(0

044

5)(0

053

9)(0

073

0)(0

109

0)[0

63]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

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nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

056

75a

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

033

35a

036

63a

0

2949

a0

5274

a0

5525

a0

8263

a

Log

(cos

tto

star

ta

busi

nes

sG

DP

per

capi

ta)

017

220

1721

0

4737

a0

3667

a0

4309

a0

6354

a0

6147

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

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4]

Un

empl

oyed

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ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

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b18

014

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(65

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(76

256)

[02

1]

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88b

874

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(07

552)

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6417

)(1

076

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[01

4]

236

58a

127

964

287

286a

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875

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693

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1868

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14]

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esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

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21a

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007

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152

0)(0

085

6)[0

07]

000

210

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093

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007

3)(0

175

6)(0

105

6)[0

01]

0

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110)

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5]

a

sign

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nt

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perc

ent

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si

gnifi

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5pe

rcen

tle

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c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EIV

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squa

res

regr

essi

ons

ofth

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oss

sect

ion

ofco

untr

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The

depe

nden

tva

riab

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are

(1)

the

empl

oym

ent

law

sin

dex

and

its

com

pone

nts

(inP

anel

A)

(2)

the

colle

ctiv

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lati

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law

sin

dex

and

its

com

pone

nts

(inP

anel

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and

(3)

the

soci

alse

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ws

inde

xan

dit

sco

mpo

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s(in

Pan

elC

)In

Pan

elD

we

repe

atre

gres

sion

sfo

rth

eth

ree

aggr

egat

ein

dice

sfo

rco

untr

ies

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sifie

das

ldquonon

dem

ocra

cies

rdquodu

ring

the

peri

od19

50ndash1

995

Usi

ngde

moc

racy

scor

esfr

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gger

san

dM

arsh

all

[200

0]w

ecl

assi

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nond

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untr

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wit

hth

e19

50ndash1

995

aver

age

dem

ocra

cysc

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belo

w8

The

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das

dem

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out

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Pan

elD

are

Aus

tral

ia

Aus

tria

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um

Can

ada

Den

mar

kF

inla

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nce

Ger

man

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dia

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and

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mai

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alan

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the

Uni

ted

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gdom

and

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Uni

ted

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ses

All

the

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sar

ede

scri

bed

inT

able

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dth

eda

taca

nbe

foun

din

http

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gso

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Dep

ende

nt

vari

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sL

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per

capi

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lega

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nch

lega

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2]

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Alt

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001

230

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c0

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810)

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840)

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102

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0)[0

21]

Pan

elB

C

olle

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orig

inC

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lati

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sin

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000

630

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a0

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(00

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[03

1]L

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27]

Col

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ive

disp

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s0

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014

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004

900

3203

a85

(00

124)

(00

477)

(00

416)

(00

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(01

029)

(01

060)

[01

9]


Pan

elC

S

ocia

lse

curi

tyla

ws

and

lega

lor

igin

Soc

ial

secu

rity

law

sin

dex

010

29a

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005

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1488

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5)[0

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ifica

nt

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perc

ent

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l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































Pan

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S

ocia

lse

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tyla

ws

and

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Soc

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TA

BL

EV

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EG

UL

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OF

LA

BO

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PO

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AR

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AN

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sin

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Pan

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)(2

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eco

llec

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nch

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lor

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man

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stan

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1928

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1975

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1975

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

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ares

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essi

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ofth

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oss

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obu

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are

show

nin

pare

nth

eses

A

llth

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riab

les

are

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din

Tab

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data

can

befo

un

din

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pi

icg

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yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

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oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

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inde

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1990

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Un

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1991

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ent

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EV

RE

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NO

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TA

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EV

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EG

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OF

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AR

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eco

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sla

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les

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31b

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left

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1928

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000

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1196

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1542

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ave

left

orce

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tion

1975

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5(0

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49]

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601)

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760)

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3]

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ief

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1975

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TA

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OR

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BE

TW

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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ende

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sin

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lect

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tion

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ws

inde

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90ndash1

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Fem

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1990

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Un

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1991

ndash200

0

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year

sol

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si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































Col

lect

ive

rela

tion

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ws

inde

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TA

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left

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1928

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a0

1542

b0

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ave

left

orce

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liti

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tion

1975

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Un

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2283

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Pan

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ele

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ter

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3]

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ief

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tion

1975

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TA

BL

EV

IIC

OR

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LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

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ise

corr

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sbe

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riou

sin

dice

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sect

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All

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scri

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able

I

Em

ploy

men

tla

ws

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x

Col

lect

ive

rela

tion

sla

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x

Soc

ial

secu

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law

sin

dex

Cou

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t

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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1991

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tle

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sign

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nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES






























































































TA

BL

EV

IR

EG

UL

AT

ION

OF

LA

BO

R

PO

LIT

ICA

LV

AR

IAB

LE

S

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

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oss

sect

ion

ofn

onso

cial

ist

cou

ntr

ies

Th

en

inet

een

cou

ntr

ies

excl

ude

dfr

omth

ista

ble

are

Arm

enia

B

ulg

aria

C

hin

aC

roat

ia

Cze

chR

epu

blic

G

eorg

ia

Hu

nga

ry

Kaz

akh

stan

K

yrgy

zR

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blic

L

atvi

aL

ith

uan

ia

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goli

aP

olan

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oman

ia

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ssia

nF

eder

atio

n

Slo

vak

Rep

ubl

ic

Slo

ven

ia

Ukr

ain

ean

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ietn

am

Th

ede

pen

den

tva

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les

are

(1)

the

empl

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ent

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sin

dex

(in

Pan

elA

)(2

)th

eco

llec

tive

rela

tion

sla

ws

inde

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(3)

the

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tyin

dex

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elC

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stst

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are

show

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eses

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llth

eva

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are

desc

ribe

din

Tab

leI

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the

data

can

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un

din

htt

pi

icg

som

yal

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per

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lor

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lor

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ndi

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igin

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stan

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[R2]

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elA

T

he

dep

end

ent

vari

able

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eem

ploy

men

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ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

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rty

inco

ngr

ess

000

340

0711

025

21a

016

31b

035

75a

023

60a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1928

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5(0

012

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065

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069

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rty

inco

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ess

000

900

1196

b0

2525

a0

1542

b0

3395

a0

1729

66h

ave

left

orce

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rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

012

1)(0

055

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036

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069

4)(0

050

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49]

Un

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den

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0

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270

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(00

156)

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109)

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408)

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690)

(00

689)

(01

354)

[04

3]

Pan

elB

T

he

dep

end

ent

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able

isth

eco

llec

tive

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tion

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ws

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Ch

ief

exec

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000

790

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ele

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ter

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ien

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093)

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495)

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302)

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601)

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760)

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3]

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ief

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63a

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ave

left

orce

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rpo

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tion

1975

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5(0

008

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036

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724

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657)

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399)

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TA

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EV

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OR

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BE

TW

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S

Th

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sbe

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dice

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sect

ion

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All

the

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sar

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bed

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able

I

Em

ploy

men

tla

ws

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x

Col

lect

ive

rela

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sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

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inde

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rth

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tion

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Log

(nu

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sto

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(nu

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lect

ive

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tion

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secu

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sin

dex

023

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Cou

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tion

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041

03a

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480

8506

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Log

(nu

mbe

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sto

star

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s)0

3439

a0

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09b

050

36a

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Log

(nu

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35a

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(cos

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per

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220

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

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sect

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obu

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are

show

nin

pare

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eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

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curi

tyla

ws

inde

xC

onst

ant

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2]

Siz

eof

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un

offi

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econ

omy

2

8030

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007

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3

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177

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Fem

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1990

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ent

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1991

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0

035

305

7617

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478)

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1]

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VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
























































































TA

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VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

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Ord

inar

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gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

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8685

a19

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3]

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Em

ploy

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the

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omy

3

7368

a

528

1165

553

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(08

193)

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985

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04)

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112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

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70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

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ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

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88b

874

9329

255

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(07

552)

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6417

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4]

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58a

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964

287

286a

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875

4)(1

693

66)

(10

1868

)[0

14]

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esof

mac

hin

eop

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ors

wag

esof

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ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

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(00

110)

(01

343)

(00

537)

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5]

a

sign

ifica

nt

at1

perc

ent

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lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EV

IR

EG

UL

AT

ION

OF

LA

BO

R

PO

LIT

ICA

LV

AR

IAB

LE

S

AN

DL

EG

AL

OR

IGIN

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofn

onso

cial

ist

cou

ntr

ies

Th

en

inet

een

cou

ntr

ies

excl

ude

dfr

omth

ista

ble

are

Arm

enia

B

ulg

aria

C

hin

aC

roat

ia

Cze

chR

epu

blic

G

eorg

ia

Hu

nga

ry

Kaz

akh

stan

K

yrgy

zR

epu

blic

L

atvi

aL

ith

uan

ia

Mon

goli

aP

olan

dR

oman

ia

Ru

ssia

nF

eder

atio

n

Slo

vak

Rep

ubl

ic

Slo

ven

ia

Ukr

ain

ean

dV

ietn

am

Th

ede

pen

den

tva

riab

les

are

(1)

the

empl

oym

ent

law

sin

dex

(in

Pan

elA

)(2

)th

eco

llec

tive

rela

tion

sla

ws

inde

x(i

nP

anel

B)

and

(3)

the

soci

alse

curi

tyin

dex

(in

Pan

elC

)R

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Lef

tpo

wer

vari

able

sL

ogG

NP

per

capi

taL

eft

pow

erva

riab

les

Fre

nch

lega

lor

igin

Ger

man

lega

lor

igin

Sca

ndi

nav

ian

lega

lor

igin

Con

stan

tN

[R2]

Pan

elA

T

he

dep

end

ent

vari

able

isth

eem

ploy

men

tla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

340

0711

025

21a

016

31b

035

75a

023

60a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1928

ndash199

5(0

012

4)(0

065

6)(0

037

7)(0

069

5)(0

056

1)(0

117

8)[0

46]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

900

1196

b0

2525

a0

1542

b0

3395

a0

1729

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

012

1)(0

055

4)(0

036

8)(0

069

4)(0

050

2)(0

111

8)[0

49]

Un

ion

den

sity

0

0066

008

270

2283

a0

1422

b0

3318

a0

3513

b57

(00

156)

(01

109)

(00

408)

(00

690)

(00

689)

(01

354)

[04

3]

Pan

elB

T

he

dep

end

ent

vari

able

isth

eco

llec

tive

rela

tion

sla

ws

ind

ex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

000

790

0384

016

17a

013

80b

012

120

2512

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

093)

(00

495)

(00

302)

(00

601)

(00

760)

(00

914)

[03

3]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

001

180

0696

c0

1624

a0

1331

b0

1075

020

63a

66h

ave

left

orce

nte

rpo

liti

cal

orie

nta

tion

1975

ndash199

5(0

008

0)(0

036

0)(0

029

2)(0

062

1)(0

724

0)(0

070

4)[0

36]

Un

ion

den

sity

0

0001

006

490

1608

a0

1337

b0

1025

032

5357

(00

104)

(01

015)

(00

326)

(00

626)

(00

936)

(00

843)

[03

3]


Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

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012

14a

009

280

1146

a0

0307

008

52c

0

5675

a66

hav

ele

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cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

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221)

[07

1]

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ion

den

sity

010

61a

0

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008

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002

320

1506

b

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5)(0

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9)(0

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0)(0

109

0)[0

63]

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sign

ifica

nt

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ent

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si

gnifi

can

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ifica

nt

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perc

ent

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l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

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ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

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(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

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rtfo

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ism

inde

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rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

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nce

dch

eck

041

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044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

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nes

s)0

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a0

4041

a

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050

36a

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Log

(nu

mbe

rof

days

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sin

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033

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036

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0

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a0

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a0

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(cos

tto

star

ta

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nes

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DP

per

capi

ta)

017

220

1721

0

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a0

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ifica

nt

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ent

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gnifi

can

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5pe

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sign

ifica

nt

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perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































Pan

elC

T

he

dep

end

ent

vari

able

isth

eso

cial

secu

rity

law

sin

dex

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

42a

013

33b

011

91a

004

080

0615

0

6151

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

28ndash1

995

(00

122)

(00

657)

(00

399)

(00

546)

(00

481)

(01

230)

[07

2]

Ch

ief

exec

uti

vean

dla

rges

tpa

rty

inco

ngr

ess

012

14a

009

280

1146

a0

0307

008

52c

0

5675

a66

hav

ele

ftor

cen

ter

poli

tica

lor

ien

tati

on19

75ndash1

995

(00

122)

(00

604)

(00

400)

(00

535)

(00

469)

(01

221)

[07

1]

Un

ion

den

sity

010

61a

0

0674

008

06c

002

320

1506

b

035

82a

57(0

012

7)(0

111

1)(0

044

5)(0

053

9)(0

073

0)(0

109

0)[0

63]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l


TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

056

75a

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

033

35a

036

63a

0

2949

a0

5274

a0

5525

a0

8263

a

Log

(cos

tto

star

ta

busi

nes

sG

DP

per

capi

ta)

017

220

1721

0

4737

a0

3667

a0

4309

a0

6354

a0

6147

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EV

IIC

OR

RE

LA

TIO

NS

BE

TW

EE

NR

EG

UL

AT

ION

IND

ICE

S

Th

eta

ble

show

spa

irw

ise

corr

elat

ion

sbe

twee

nva

riou

sin

dice

sof

regu

lati

onfo

rth

ecr

oss

sect

ion

of85

cou

ntr

ies

All

the

vari

able

sar

ede

scri

bed

inT

able

I

Em

ploy

men

tla

ws

inde

x

Col

lect

ive

rela

tion

sla

ws

inde

x

Soc

ial

secu

rity

law

sin

dex

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

Col

lect

ive

rela

tion

sla

ws

inde

x0

4894

a

Soc

ial

secu

rity

law

sin

dex

023

39b

022

75b

Cou

rtfo

rmal

ism

inde

xfo

rth

eev

icti

onof

an

onpa

yin

gte

nan

t0

3292

a0

5134

a0

1283

Cou

rtfo

rmal

ism

inde

xfo

rth

eco

llec

tion

ofa

bou

nce

dch

eck

041

03a

044

30a

004

480

8506

a

Log

(nu

mbe

rof

step

sto

star

ta

busi

nes

s)0

3439

a0

4041

a

023

09b

050

36a

056

75a

Log

(nu

mbe

rof

days

tost

art

abu

sin

ess)

033

35a

036

63a

0

2949

a0

5274

a0

5525

a0

8263

a

Log

(cos

tto

star

ta

busi

nes

sG

DP

per

capi

ta)

017

220

1721

0

4737

a0

3667

a0

4309

a0

6354

a0

6147

a

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l



VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES

















































































VII OUTCOMES






TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

yle

ast

squ

ares

regr

essi

ons

ofth

ecr

oss

sect

ion

ofco

un

trie

sR

obu

stst

anda

rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

tyla

ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

)(6

375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

)(6

879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

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lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































TA

BL

EV

III

RE

GU

LA

TIO

NO

FL

AB

OR

AN

DO

UT

CO

ME

S

Ord

inar

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ast

squ

ares

regr

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ons

ofth

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ofco

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stst

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rder

rors

are

show

nin

pare

nth

eses

A

llth

eva

riab

les

are

desc

ribe

din

Tab

leI

and

the

data

can

befo

un

din

htt

pi

icg

som

yal

eed

u

Dep

ende

nt

vari

able

sA

vera

geye

ars

ofsc

hoo

lin

gE

mpl

oym

ent

law

sin

dex

Col

lect

ive

rela

tion

sla

ws

inde

xS

ocia

lse

curi

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ws

inde

xC

onst

ant

N[R

2]

Siz

eof

the

un

offi

cial

econ

omy

2

8030

a3

5502

487

084a

85(0

366

5)(7

007

0)(4

494

1)[0

31]

2

8685

a19

126

2c42

369

a85

(03

763)

(96

501)

(50

447)

[03

3]

233

68a

8

6085

521

915a

85(0

500

9)(7

273

0)(3

465

0)[0

31]

Em

ploy

men

tin

the

un

offi

cial

econ

omy

3

7368

a

528

1165

553

1a46

(08

193)

(11

7934

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375

1)[0

37]

4

1016

a33

476

1b49

791

7a46

(07

008)

(14

1319

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879

5)[0

42]

3

9765

a3

0795

625

621a

46(0

985

8)(1

043

04)

(46

112)

[03

7]

Mal

epa

rtic

ipat

ion

inla

bor

forc

e19

90ndash1

994

0

7144

a

618

70a

913

752a

78(0

151

9)(1

814

8)(1

427

4)[0

30]

0

6782

a

946

94a

923

725a

78(0

146

8)(2

526

9)(1

501

5)[0

31]

0

4918

a

429

43c

893

289a

78(0

177

4)(2

341

5)(1

118

9)[0

26]

Fem

ale

part

icip

atio

nin

labo

rfo

rce

1990

ndash199

4

028

1010

413

652

776

3a78

(07

163)

(10

0358

)(6

850

1)[0

02]

0

2066

12

118

962

699

2a78

(07

677)

(14

6474

)(7

996

7)[0

01]

014

50

759

0259

229

3a78

(09

509)

(11

8392

)(6

049

5)[0

01]


Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

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lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES
















































































Un

empl

oym

ent

rate

1991

ndash200

0

035

305

7617

b8

7263

a65

(02

511)

(28

478)

(29

019)

[01

1]

038

643

6447

101

519a

65(0

240

2)(3

827

9)(3

062

2)[0

06]

0

5299

b3

9441

103

762a

65(0

253

6)(3

539

7)(2

557

7)[0

06]

Un

empl

oyed

mal

es20

ndash24

year

sol

dac

tive

mal

es20

ndash24

year

sol

d19

91ndash2

000

0

0435

146

331a

797

78c

52(0

432

9)(4

458

2)(4

550

9)[0

13]

0

1017

114

341c

104

372b

52(0

437

2)(6

677

5)(5

109

6)[0

04]

0

5567

115

683

117

265c

52(0

519

4)(1

023

00)

(62

166)

[00

4]

Un

empl

oyed

fem

ales

20ndash2

4ye

ars

old

acti

vefe

mal

es20

ndash24

year

sol

d19

91ndash2

000

1

7850

b18

014

6a23

559

0a52

(07

247)

(65

874)

(76

256)

[02

1]

187

88b

874

9329

255

7a52

(07

552)

(11

6417

)(1

076

92)

[01

4]

236

58a

127

964

287

286a

52(0

875

4)(1

693

66)

(10

1868

)[0

14]

Wag

esof

mac

hin

eop

erat

ors

wag

esof

cler

ksan

dcr

aft

and

rela

ted

trad

esw

orke

rs19

90ndash1

999

000

150

2202

085

21a

52(0

007

0)(0

152

0)(0

085

6)[0

07]

000

210

0418

093

57a

52(0

007

3)(0

175

6)(0

105

6)[0

01]

0

0208

c0

4084

a0

8789

a52

(00

110)

(01

343)

(00

537)

[01

5]

a

sign

ifica

nt

at1

perc

ent

leve

lb

si

gnifi

can

tat

5pe

rcen

tle

vel

c

sign

ifica

nt

at10

perc

ent

leve

l






VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES




















































































VIII CONCLUSION









YALE UNIVERSITY

THE WORLD BANK




REFERENCES






















































































YALE UNIVERSITY

THE WORLD BANK




REFERENCES

















































































YALE UNIVERSITY

THE WORLD BANK




REFERENCES









































































































































































Documents

THE REGULATION OF LABOR* J UAN C. B OTERO S IMEON D … · Bellard, Gabriela Enrigue, Manuel Garcia-Huitron, Eidelman Gonzalez, Mag-dalena Lopez-Morton, Camila Madrinan, Christian