DP14277 Who demands labour (de)regulation in the developing world? Insiderâ??outsider theory revisited
|Author(s):||Ravi Kanbur, Santiago LĂłpez-Cariboni, Lucas Ronconi|
|Publication Date:||January 2020|
|Keyword(s):||Fairness, informal, Labour, monopsony, Segmentation|
|JEL(s):||J4, J8, O17|
|Programme Areas:||Labour Economics, Development Economics|
|Link to this Page:||cepr.org/active/publications/discussion_papers/dp.php?dpno=14277|
Contrary to the predictions of the insiderĂ˘??outsider model, we show that the large majority of outsiders in developing countries support, rather than oppose, protective labour regulations. This evidence holds across countries in different regions, across different types of protective labour regulations (i.e. severance payment, minimum wages, working time), and for different categories of outsiders (i.e. unemployed workers and employees without access to legally mandated labour benefits). We revise the economic and political assumptions of the insiderĂ˘??outsider model, discussing their empirical relevance in a developing country context.