| Registro completo |
| Provedor de dados: |
AgEcon
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| País: |
United States
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| Título: |
Effective Labor Regulation and Microeconomic Flexibility
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| Autores: |
Caballero, Ricardo J.
Cowan, Devin N.
Engel, Eduardo M.R.A.
Micco, Alejandro
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| Data: |
2006-01-27
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| Ano: |
2004
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| Palavras-chave: |
Microeconomic rigidities
Creative-destruction
Job security regulation
Adjustment costs
Rule of law
Productivity growth
Labor and Human Capital
E24
J23
J63
J64
K00
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| Resumo: |
Microeconomic flexibility, by facilitating the process of creative-destruction, is at the core of economic growth in modern market economies. The main reason for why this process is not infinitely fast is the presence of adjustment costs, some of them technological, others institutional. Chief among the latter is labor market regulation. While few economists would object to such a view, its empirical support is rather weak. In this paper we revisit this hypothesis and find strong evidence for it. We use a new sectoral panel for 60 countries and a methodology suitable for such a panel. We find that job security regulation clearly hampers the creative-destruction process, especially in countries where regulations are likely to be enforced. Moving from the 20th to the 80th percentile in job security, in countries with strong rule of law, cuts the annual speed of adjustment to shocks by a third while shaving off about one percent from annual productivity growth. The same movement has negligible effects in countries with weak rule of law.
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| Tipo: |
Working or Discussion Paper
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| Idioma: |
Inglês
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| Identificador: |
19636
http://purl.umn.edu/28486
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| Editor: |
AgEcon Search
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| Relação: |
Yale University>Economic Growth Center>Center Discussion Papers
Center Discussion Paper No. 893
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| Formato: |
34
application/pdf
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