Enforceability of Labor Law : Evidence from a Labor Court in Mexico
The authors analyze lawsuits involving publicly-appointed lawyers in a labor court in Mexico to study how a rigid law is enforced. They show that, even after a judge has awarded something to a worker alleging unjust dismissal, the award goes uncoll...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
World Bank, Washington, DC
2012
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2008/01/8956991/enforceability-labor-law-evidence-labor-court-mexico http://hdl.handle.net/10986/6488 |
| Summary: | The authors analyze lawsuits involving
publicly-appointed lawyers in a labor court in Mexico to
study how a rigid law is enforced. They show that, even
after a judge has awarded something to a worker alleging
unjust dismissal, the award goes uncollected 56 percent of
the time. Workers who are dismissed after working more than
seven years, however, do not leave these awards uncollected
because their legally-mandated severance payments are
larger. A simple theoretical model is used to generate
predictions on how lawsuit outcomes should depend on the
information available to the worker and on the worker's
cost of collecting an award after trial, both of which are
determined in part by the worker's lawyer. Differences
in outcomes across lawyers are consistent with the
hypothesis that firms take advantage both of workers who are
poorly informed and of workers who find it more costly to
collect an award after winning at trial. |
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