2023-09-28 14:46:10 +00:00
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abstract: 'Purpose The purpose of this paper is to understand labor market
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regulations and their consequences for the allocation of resources.
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Design/methodology/approach This paper constructs a theoretical model to
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study labor market regulations in developing countries and how it
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affects the allocation of resources between the less productive informal
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activities and more productive formal activities. It also provides
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empirical support for some theoretical results using cross-country data.
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Findings When workers are risk-averse and the market for insurance
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against labor income risk is missing, regulations that provide insurance
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to workers (such as severance payments) reduce misallocation. However,
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regulations that simply create barriers to the dismissal of workers
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increase misallocation and end up reducing the welfare of workers. This
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study also provides some empirical evidence broadly consistent with the
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theoretical results using cross-country data. While dismissal
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regulations increase the share of informal employment, severance
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payments to workers do not. Research limitations/implications The
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empirical exercise is constrained by the lack of availability of good
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data on the informal sector. Originality/value The analysis of the
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alternative labor market regulations analyzed in this paper in the
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presence of risk-averse workers is an original contribution to the
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literature.'
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affiliation: 'Jha, P (Corresponding Author), UC Irvine, Dept Econ, Irvine, CA 92697
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USA.
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Jha, Priyaranjan, UC Irvine, Dept Econ, Irvine, CA 92697 USA.
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Hasan, Rana, Asian Dev Bank, South Asia Dept, Mandaluyong City, Philippines.'
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author: Jha, Priyaranjan and Hasan, Rana
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author-email: pranjan@uci.edu
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author_list:
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- family: Jha
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given: Priyaranjan
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- family: Hasan
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given: Rana
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da: '2023-09-28'
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doi: 10.1108/IGDR-05-2021-0067
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earlyaccessdate: NOV 2021
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eissn: 1753-8262
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files: []
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issn: 1753-8254
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journal: INDIAN GROWTH AND DEVELOPMENT REVIEW
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keywords: 'Dismissal regulations; Severance payments; Misallocation; Informal
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employment; Minimum wage; O12; O17; O57; J38; J46'
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language: English
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month: MAR 14
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number: '1'
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number-of-cited-references: '32'
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pages: 18-59
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papis_id: 30ead6bfbd77abc526688835757e0425
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ref: Jha2022labormarket
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times-cited: '0'
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title: Labor market policies, informality and misallocation
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2023-10-01 08:15:07 +00:00
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type: article
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2023-09-28 14:46:10 +00:00
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unique-id: WOS:000723019500001
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usage-count-last-180-days: '0'
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usage-count-since-2013: '4'
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volume: '15'
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web-of-science-categories: Development Studies
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year: '2022'
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