The Impact of Labor Market Regulations

Lyn Squire and Sethaput Suthiwart-Narueput

The World Bank Economic Review, 1997, vol. 11, issue 1, 119-43

Abstract: This article investigates the impact of labor market regulations in a setting with incomplete compliance. It takes as its starting point the limited evidence regarding the distortionary costs of labor market regulations and argues that there may exist natural limits to the efficiency losses engendered by such regulations. The article reviews some stylized facts regarding labor market behavior, presents an analytical model that may explain such behavior, and provides a checklist for assessing the distortionary impact of regulations such as minimum wages. Copyright 1997 by Oxford University Press.

Date: 1997
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Working Paper: The impact of labor market regulations (1995)
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