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Labour Market Regulations for Development: Enhancing Institutions and Policies in Emerging Economies

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The Labour Markets of Emerging Economies

Part of the book series: Advances in Labour Studies ((AILS))

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Abstract

The discipline of economics has become increasingly concerned with the understanding of labour markets’ adjustment in response to economic and structural changes and, in particular, the role of labour market regulations (institutions and policies) in influencing that process. The global financial crisis has recently revealed the extent to which the policy and institutional mix had been able to provide fair adjustments protecting workers and promoting employment outcomes. Assessing the impact of labour market regulation is, however, one of the most complex areas since they both constitute a warranty of fair employment conditions, but may at the same time be an obstacle to (formal) employment growth (see Freeman 2005). Therefore, while regulations’ first objective is to correct market failures and improve workers’ welfare, it can lead to adverse outcomes, even for the same workers that regulations want to protect. The perspective of this section is to articulate these two aspects and focus on the ‘economics’ of labour market regulations. As stated before, some of the regulations have to do with the welfare state, as they provide income guarantees; when considered ‘too generous’, they are accused of creating unemployment through two mechanisms: work disincentives and wage behaviour. Others may influence the wage structure and/or labour costs.

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Authors
  1. Sandrine Cazes
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  2. Sher Verick
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Cazes, S., Verick, S. (2013). Labour Market Regulations for Development: Enhancing Institutions and Policies in Emerging Economies. In: The Labour Markets of Emerging Economies. Advances in Labour Studies. Palgrave Macmillan, London. https://doi.org/10.1057/9781137325358_3

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