|RELATED TOPICS:||Poverty Reduction and Labor|
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This paper examines the effect of employment protection regulation on gross job flows in a sample of developed and developing countries. By implementing a differences-in-differences test we lessen the potentially severe endogeneity and omitted variable problems associated with cross-country regressions. This test is based on the hypothesis that job security regulations are more binding in some sectors of economic activity than in others, depending on sector-specific characteristics such as the variance of demand or technological shocks. Unlike most of the existing literature, our analysis indicates that more stringent job security regulations slow down gross job flows, and this tendency is more pronounced in sectors that require higher labor flexibility. These effects occur within the sample of developed and developing countries and are very large in magnitude. Moreover, these effects are robust to changes in regulatory measures, measurement of sector flexibility requirements, control variables and samples.
The Research Department is pleased to present the latest edition of its newsletter, Ideas for Development in the Americas (IDEA). This issue is based on the IDB's 2004 report on Economic and Social Progress in Latin America, which focuses on the problems surrounding people and their jobs. The report presents an anatomy of Latin American labor markets, a diagnosis of their ills, and prescriptions f ... (View publication)
This paper empirically explores the effects of payroll taxes, value-added taxes and corporate income taxes on a variety of labor market outcomes such as employment, unemployment, informality, and wages. Using national-level data on labor variables for 15 Latin American countries, the results indicate that the effects of each tax are distinctly different and may depend on several aspects of labor a ... (View publication)
Over the last two decades Mexico has had an open trade regime, experienced macroeconomic stability, and made substantial progress in education. However, average workers’ earnings have stagnated and earnings for workers with more schooling have declined, compressing the earnings distribution and lowering the returns to education. We hypothesize that these developments are explained by large an ... (View publication)
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