Institutional Enforcement, Labor-Market Rigidities, and Economic Performance

César Calderón, Gianmarco León-Ciliotta () and Alberto Chong

No 1942, IDB Publications (Working Papers) from Inter-American Development Bank

Abstract: This paper study the issue of institutional enforcement of regulations by focusing on labor-market policies and their potential link to economic performance. It test the different impacts of enforceable and non-enforceable labor regulations by proxying non-enforceable labor rigidity measures using data on conventions from the International Labor Organization (ILO). It has been argued that non-enforceable conventions -that is, those that exist on paper and are simply de jure regulations -appear to be more distortionary and tend to be the least enforced in practice (Squire and Suthiwart-Narueput, 1997). According to Freeman (1993), these conventions reflect the ideal regulatory framework from an institutionalist perspective and cover a variety of labor market issues, from child labor to placement agencies. Whereas in theory, a country's ratification of ILO conventions gives the country legal status and thus supersedes domestic regulations relating to those issues, in practice the degree of labor-market rigidity depends on how the conventions are enforced. It is the outcome of the regulations that matters, rather than their number.

Keywords: WP-589 (search for similar items in EconPapers)
Date: 2006-10
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Related works:
Journal Article: Institutional enforcement, labor-market rigidities, and economic performance (2007)
Working Paper: Institutional Enforcement, Labor-Market Rigidities, and Economic Performance (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:idb:brikps:1942

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