Labor Market Institutions and Income Inequality: An Empirical Exploration

This paper presents evidence on the impact of labor regulations on income inequality using a recently published database on labor institutions and outcomes as well as different panel data analysis techniques for a large sample of countries for 1970-2000. When applying our preferred technique we find...

Full description

Bibliographic Details
Main Authors: Calderon, Cesar, Chong, Alberto
Format: Journal Article
Language:EN
Published: 2012
Subjects:
Online Access:http://hdl.handle.net/10986/5488
Description
Summary:This paper presents evidence on the impact of labor regulations on income inequality using a recently published database on labor institutions and outcomes as well as different panel data analysis techniques for a large sample of countries for 1970-2000. When applying our preferred technique we find that both de jure and de facto regulations improve the distribution of income although the former appear to be non-robustly associated with improving income inequality. This result partly reflects the fact that regulations are endogenous and, more interestingly, that different regulation yield distinct effects.