Institutional Enforcement, Labor Market Rigidities, and Economic Performance

Emerging Markets Review, Vol. 8, No. 1, March 2007

Inter-American Development Bank Working Paper No. 589

23 Pages Posted: 11 Jan 2007

See all articles by César Calderón

César Calderón

World Bank

Alberto Chong

University of Ottawa

Gianmarco León-Ciliotta

Universitat Pompeu Fabra and Barcelona GSE; Barcelona Graduate School of Economics (Barcelona GSE); Institute for Political Economy and Governance, Barcelona; CEPR

Abstract

In this paper we compare non-enforceable and enforceable measures of labor rigidities as a measure of the quality of labor institutions and test whether such labor labor rigidites are conducive to long run growth. We find than non-enforceable labor regulations do not have a bearing in economic growth but enforceable labor regulations do. In fact, when using a GMM-IV method for a panel data of countries during the period 1970-2000 that accounts for weak endogeneity we find that such link is negative and statistically significant. It appears that excessive labor rigidities are thus negative linked with long run economic growth.

Keywords: Institutions, Enforcement, Labor Rigidities, Growth, GMM-IV

JEL Classification: O10, E60, J08, O40

Suggested Citation

Calderon, Cesar A. and Chong, Alberto and León-Ciliotta, Gianmarco, Institutional Enforcement, Labor Market Rigidities, and Economic Performance. Emerging Markets Review, Vol. 8, No. 1, March 2007, Inter-American Development Bank Working Paper No. 589, Available at SSRN: https://ssrn.com/abstract=933995

Cesar A. Calderon

World Bank ( email )

1818 H Street NW
Washington, DC 20433
United States
202-458-7214 (Phone)
202-522-7528 (Fax)

HOME PAGE: http://www.worldbank.org/laceconomist

Alberto Chong (Contact Author)

University of Ottawa ( email )

2292 Edwin Crescent
Ottawa, Ontario K2C 1H7
Canada

Gianmarco León-Ciliotta

Universitat Pompeu Fabra and Barcelona GSE ( email )

Ramon Trias Fargas 25-27
Barcelona, 08005
Spain
(+34) 93 542-1757 (Phone)
(+34) 93 542-1746 (Fax)

HOME PAGE: http://https://sites.google.com/site/gianmarcoleon/

Barcelona Graduate School of Economics (Barcelona GSE) ( email )

Ramon Trias Fargas 25-27
Barcelona, Catalonia 08014
Spain

Institute for Political Economy and Governance, Barcelona ( email )

Ramon Trias Fargas, 25-27
Barcelona, 08005
Spain

CEPR ( email )

London
United Kingdom

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