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Institutional Enforcement, Labor-Market Rigidities, and Economic Performance

By César Calderón, César Calderón, César Calderón, César Calderón, Gianmarco León, Gianmarco León, Gianmarco León, Gianmarco León and Alberto E. Chong and Alberto E. Chong and Alberto E. Chong and Alberto E. Chong


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

Topics: Labor, Empleo, Emprego, Emploie, Economie, Economía, Economia, Economics, WP-589
Year: 2016
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