Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/51426 
Year of Publication: 
2006
Series/Report no.: 
Working Paper No. 589
Publisher: 
Inter-American Development Bank, Research Department, Washington, DC
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

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