Job Protection Deregulation In Good And Bad Times
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Author | : Mr.Romain A Duval |
Publisher | : International Monetary Fund |
Total Pages | : 44 |
Release | : 2017-12-14 |
Genre | : Business & Economics |
ISBN | : 1484333438 |
This paper explores the short-term employment effect of deregulating job protection for regular workers and how it varies with prevailing business cycle conditions. We apply a local projection method to a newly constructed “narrative” dataset of major regular job protection reforms covering 26 advanced economies over the past four decades. The analysis relies on country-sector-level data, using as an identifying assumption the fact that stringent dismissal regulations are more binding in sectors that are characterized by a higher “natural” propensity to regularly adjust their workforce. We find that the responses of sectoral employment to large job protection deregulation shocks depend crucially on the state of the economy at the time of reform——they are positive in an expansion, but become negative in a recession. These findings are consistent with theory, and are robust to a broad range of robustness checks including an Instrumental Variable approach using political economy drivers of reforms as instruments. Our results provide a case for undertaking job protection reform in good times, or for designing it in ways that enhance its short-term impact.
Author | : Gabriele Ciminelli |
Publisher | : International Monetary Fund |
Total Pages | : 72 |
Release | : 2018-08-16 |
Genre | : Business & Economics |
ISBN | : 1484373723 |
Labor market deregulation, intended to boost productivity and employment, is one plausible, yet little studied, driver of the decline in labor shares that took place across most advanced economies since the early 1990s. This paper assesses the impact of job protection deregulation in a sample of 26 advanced economies over the period 1970-2015, using a newly constructed dataset of major reforms to employment protection legislation for regular contracts. We apply the local projection method to estimate the dynamic response of the labor share to our reform events at both the country and the country-industry levels. For the latter, we employ a differences-in-differences identification strategy using two identifying assumptions grounded in theory—namely that job protection deregulation should have larger negative effects in industries characterized by (i) a higher “natural” propensity to adjust the workforce, and (ii) a lower elasticity of substitution between capital and labor. We find a statistically significant, economically large and robust negative effect of deregulation on the labor share. In particular, illustrative back-of-the-envelope calculations suggest that job protection deregulation may have contributed about 15 percent to the average labor share decline in advanced economies. Together with existing evidence regarding the macroeconomic gains from job protection and other labor market reforms, our results also point to the need for policymakers to address efficiency-equity trade-offs when designing such reforms.
Author | : Cary Coglianese |
Publisher | : University of Pennsylvania Press |
Total Pages | : 299 |
Release | : 2014-01-06 |
Genre | : Political Science |
ISBN | : 0812209249 |
As millions of Americans struggle to find work in the wake of the Great Recession, politicians from both parties look to regulation in search of an economic cure. Some claim that burdensome regulations undermine private sector competitiveness and job growth, while others argue that tough new regulations actually create jobs at the same time that they provide other benefits. Does Regulation Kill Jobs? reveals the complex reality of regulation that supports neither partisan view. Leading legal scholars, economists, political scientists, and policy analysts show that individual regulations can at times induce employment shifts across firms, sectors, and regions—but regulation overall is neither a prime job killer nor a key job creator. The challenge for policymakers is to look carefully at individual regulatory proposals to discern any job shifting they may cause and then to make regulatory decisions sensitive to anticipated employment effects. Drawing on their analyses, contributors recommend methods for obtaining better estimates of job impacts when evaluating regulatory costs and benefits. They also assess possible ways of reforming regulatory institutions and processes to take better account of employment effects in policy decision-making. Does Regulation Kills Jobs? tackles what has become a heated partisan issue with exactly the kind of careful analysis policymakers need in order to make better policy decisions, providing insights that will benefit both politicians and citizens who seek economic growth as well as the protection of public health and safety, financial security, environmental sustainability, and other civic goals. Contributors: Matthew D. Adler, Joseph E. Aldy, Christopher Carrigan, Cary Coglianese, E. Donald Elliott, Rolf Färe, Ann Ferris, Adam M. Finkel, Wayne B. Gray, Shawna Grosskopf, Michael A. Livermore, Brian F. Mannix, Jonathan S. Masur, Al McGartland, Richard Morgenstern, Carl A. Pasurka, Jr., William A. Pizer, Eric A. Posner, Lisa A. Robinson, Jason A. Schwartz, Ronald J. Shadbegian, Stuart Shapiro.
Author | : Romain Duval |
Publisher | : |
Total Pages | : 45 |
Release | : 2018 |
Genre | : |
ISBN | : |
This paper explores the short-term employment effect of deregulating job protection forregular workers and how it varies with prevailing business cycle conditions. We apply a localprojection method to a newly constructed 'narrative' dataset of major regular job protectionreforms covering 26 advanced economies over the past four decades. The analysis relies oncountry-sector-level data, using as an identifying assumption the fact that stringent dismissalregulations are more binding in sectors that are characterized by a higher 'natural' propensityto regularly adjust their workforce. We find that the responses of sectoral employment to largejob protection deregulation shocks depend crucially on the state of the economy at the timeof reform--they are positive in an expansion, but become negative in a recession. Thesefindings are consistent with theory, and are robust to a broad range of robustness checksincluding an Instrumental Variable approach using political economy drivers of reforms asinstruments. Our results provide a case for undertaking job protection reform in good times,or for designing it in ways that enhance its short-term impact.
Author | : Tony Avirgan |
Publisher | : |
Total Pages | : 524 |
Release | : 2005 |
Genre | : Business & Economics |
ISBN | : |
Author | : James J. Heckman |
Publisher | : University of Chicago Press |
Total Pages | : 585 |
Release | : 2007-11-01 |
Genre | : Law |
ISBN | : 0226322858 |
Law and Employment analyzes the effects of regulation and deregulation on Latin American labor markets and presents empirically grounded studies of the costs of regulation. Numerous labor regulations that were introduced or reformed in Latin America in the past thirty years have had important economic consequences. Nobel Prize-winning economist James J. Heckman and Carmen Pagés document the behavior of firms attempting to stay in business and be competitive while facing the high costs of complying with these labor laws. They challenge the prevailing view that labor market regulations affect only the distribution of labor incomes and have little or no impact on efficiency or the performance of labor markets. Using new micro-evidence, this volume shows that labor regulations reduce labor market turnover rates and flexibility, promote inequality, and discriminate against marginal workers. Along with in-depth studies of Colombia, Peru, Brazil, Argentina, Chile, Uruguay, Jamaica, and Trinidad, Law and Employment provides comparative analysis of Latin American economies against a range of European countries and the United States. The book breaks new ground by quantifying not only the cost of regulation in Latin America, the Caribbean, and in the OECD, but also the broader impact of this regulation.
Author | : Mr.Romain A Duval |
Publisher | : International Monetary Fund |
Total Pages | : 31 |
Release | : 2021-02-26 |
Genre | : Business & Economics |
ISBN | : 1513570749 |
We explore the impact of major labor and product market reforms on current account dynamics using a new “narrative” database of major changes in employment protection for regular workers and product market regulation for non-manufacturing industries covering 26 advanced economies over the past four decades. Our main finding is that product market deregulation is associated with a weakening of the current account, while labor market deregulation is associated with an improvement. These effects are transitory and driven by both saving and investment responses. Labor and product market reforms both have a more positive impact on the current account balance when implemented under weak macroeconomic conditions. Our results are broadly consistent with predictions from recent DSGE models with endogenous producer entry and labor market frictions.
Author | : World Bank |
Publisher | : World Bank Publications |
Total Pages | : 254 |
Release | : 2019-11-21 |
Genre | : Business & Economics |
ISBN | : 1464814414 |
Seventeen in a series of annual reports comparing business regulation in 190 economies, Doing Business 2020 measures aspects of regulation affecting 10 areas of everyday business activity.
Author | : Stephen Sweet |
Publisher | : SAGE Publications |
Total Pages | : 305 |
Release | : 2015-12-16 |
Genre | : Social Science |
ISBN | : 1483358267 |
In the Third Edition of Changing Contours of Work: Jobs and Opportunities in the New Economy, Stephen Sweet and Peter Meiksins once again provide a rich analysis of the American workplace in the larger context of an integrated global economy. Through engaging vignettes and rich data, this text frames the development of jobs and employment opportunities in an international comparative perspective, revealing the historical transformations of work (the “old economy” and the “new economy”) and identifying the profound effects that these changes have had on lives, jobs, and life chances. The text examines the many complexities of race, class, and gender inequalities in the modern-day workplace, and details the consequences of job insecurity and work schedules mismatched to family needs. Throughout the text, strategic recommendations are offered to improve the new economy.
Author | : Jules Backman |
Publisher | : |
Total Pages | : 200 |
Release | : 1981 |
Genre | : Law |
ISBN | : |