Simeon Djankov, Eva (Yiwen) Zhang, 22 November 2021

Leaving human capital out of policy discussions might lead to incorrect inferences about which measures were most successful during the pandemic. Based on a sample of 45 mostly OECD economies, the authors of this column show that both high levels of human capital and, to a lesser extent, flexible labour regulation have allowed labour force participation to recover faster during the Covid crisis. Countries that prepare to fight the effects of globalisation and robotics have also managed to alleviate the effects of the shock on the labour market. 

Marianne Bertrand, Chang-Tai Hsieh, Nick Tsivanidis, 20 October 2021

Changes in contract labour regulation were introduced in India in the late 1940s. The hope was that controlling whether firms could downsize would reduce mass job losses as large British companies left the country post-independence. This column explores the effect of the Industrial Disputes Act on firms of different sizes. The authors find that smaller firms did not see much change, but larger firms did employ fewer contract workers as a result. However, this effect was driven by firms exploiting a loophole, rather than the law itself.

Laurent Bossavie, Yoonyoung (Yoon) Cho, Rachel Heath, 27 August 2020

The collapse of the Rana Plaza factory building in Bangladesh in April 2013 is widely considered the worst accident in the history of the garment industry. It intensified local and international attention paid to working conditions in the industry and resulted in a series of reforms, including a minimum wage and high-profile but voluntary audits examining safety. This column studies the effects of those reforms on workers and finds that while working conditions increased after the reforms, women’s wages increased at first but fell in the longer run, as did the likelihood of having a formal work contract.

Ravi Kanbur, Lucas Ronconi, 30 March 2016

Current de jure measures of labour regulation stringency point to negative consequences of labour laws. This column presents new evidence on cross-country measurements of enforcement of labour laws from almost every country in the world. The authors argue that the consequences of labour enforcement cannot be credibly assessed using de jure measures which ignore the chance that enforcement is lower in places with stricter laws. On average, there is a negative correlation between the stringency of labour regulation and the intensity of its enforcement.

Ross Levine, Chen Lin, 02 July 2015

Labour market regulations have important implications for both the incidence of cross-border acquisitions, and the outcomes for acquiring firms. This column explores how variations in labour regulations between countries affect cross-border acquisitions and subsequent firm performance. For a sample of 50 countries, firms are found to enjoy larger returns when they acquire a target in a country with weaker labour regulations than the acquirer’s home country.

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