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Title:Institutional enforcement, labor-market rigidities, and economic performance PDF Logo
Authors:Calderón, César
Chong, Alberto
León, Gianmarco
Issue Date:2006
Series/Report no.:Working paper // Inter-American Development Bank, Research Department 589
Abstract:This paper compares non-enforceable and enforceable measures of labor rigidities as a measure of the quality of labor institutions, and tests whether such labor rigidities are conducive to long-run growth. We find that non-enforceable labor regulations do not have a bearing on economic growth, but enforceable labor regulations do. In fact, when using a GMM-IV method for a panel data of countries during the period 1970-2000 that accounts for weak endogeneity, we find that such a link is negative and statistically significant. It appears that excessive labor rigidities are thus negatively linked with long-run economic growth.
Subjects:Institutions
Enforcement
Labor Rigidities
Growth
GMM-IV
JEL:O10
E60
J08
O40
Document Type:Working Paper
Appears in Collections:Research Department Working Papers, Inter-American Development Bank

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