The Impact of Extended Employment Protection Laws on the Demand for Temporary Agency Workers

Pablo Munoz and Alejandro Micco ()
Authors registered in the RePEc Author Service: Pablo Munoz and Pablo Muñoz Henriquez

Institute for Research on Labor and Employment, Working Paper Series from Institute of Industrial Relations, UC Berkeley

Abstract: We study the impact of a reform that increased the regulatory burden on temporary agency work (TAW) in Chile. Using a panel of manufacturing plants, we show that the use of TAW fell immediately after the regulation, with differential effects by plants’ size and volatility. Difference-in-differences estimates suggest that plants using TAW substituted away from agency workers after the regulation, increasing regular work by 9.2%. Despite this substitution effect, total employment decreased by 8.6% in these plants. We report less precise evidence of negative scale effects on output and profits.

Keywords: Law; Social and Behavioral Sciences; Global Labor; Labor Markets; Public Policy (search for similar items in EconPapers)
Date: 2019-09-01
New Economics Papers: this item is included in nep-law
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