Employment regulations through the eyes of employers - do they matter and how do firms respond to them?

Gaelle Pierre and Stefano Scarpetta

No 3463, Policy Research Working Paper Series from The World Bank

Abstract: The authors present evidence on how employers perceive labor regulations and react when these are perceived to constrain the operation of their firm. They draw from harmonized surveys of (up to) 17,000 firms around the world and compare employers'responses with actual labor legislation. The authors find that employers'concerns about labor regulations are closely matched by the relative stringency of de jure labor laws. Countries that have, from an international perspective, tight labor regulations tend to have higher proportions of employers reporting these regulations as severe constraints. But not all firms are affected in the same way by onerous labor regulations. Medium sized firms are those whose business and prospects for growth are most negatively affected. Similarly, innovating firms are disproportionally affected by tight labor regulations. There is also clear evidence in the data that firms facing tight regulations invest more in training and make greater use of temporary employment. Small firms mainly rely on temporary employment, while medium and large firms, as well as innovating firms, tend to rely more on on-the-job training if labor regulations make hiring and firing very costly.

Keywords: Health Monitoring&Evaluation; Environmental Economics&Policies; Public Health Promotion; Labor Policies; Labor Management and Relations; Environmental Economics&Policies; Labor Management and Relations; Health Monitoring&Evaluation; Labor Standards; Banks&Banking Reform (search for similar items in EconPapers)
Date: 2004-12-01
New Economics Papers: this item is included in nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (56)

Downloads: (external link)
http://www-wds.worldbank.org/external/default/WDSC ... ered/PDF/WPS3463.pdf (application/pdf)

Related works:
Working Paper: Employment Regulations through the Eyes of Employers: Do They Matter and How Do Firms Respond to Them? (2004)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wbk:wbrwps:3463

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi ().