Betcherman, Gordon2013-12-172013-12-172012-11https://hdl.handle.net/10986/16382This paper reviews the findings of more than 150 studies on the impacts of four types of labor market institutions: minimum wages, employment protection regulation, unions and collective bargaining, and mandated benefits. The review places particular emphasis on results from developing countries. Impacts studied are on living standards (employment and earnings effects), productivity, and social cohesion, to the extent that this has been analyzed. Strong and opposing views are held on the costs and benefits of labor market institutions. On balance, the results of this review suggest that, in most cases, the impacts of these institutions are smaller than the heat of the debates would suggest. Efficiency effects of labor market regulations and collective bargaining are sometimes found but not always, and the effects can be in either direction and are usually modest. Distributional impacts are clearer, with two effects predominating: an equalizing effect among covered workers but groups such as youth, women, and the less skilled disproportionately outside the coverage and its benefits. While the overall conclusion is one of modest effects in most cases, this does not mean that impacts cannot be more dramatic where regulations are set or institutions operate in ways that exacerbate the labor market imperfections that they were designed to address.en-USCC BY 3.0 IGOaccess to employmentactive laboractive labor marketactive labor market programsadverse effectsAggregate employmentassessing labor marketbargaining powerbusiness cyclecapital investmentscivil unrestcollective agreementscollective bargainingcollective dismissalcompetitive equilibriumcompetitive labor marketscompetitive marketcrisescultural valuesCurrent Populationdeveloping countriesDevelopment Economicsdiscriminationdismissaldismissalsdisplaced workersdriversearningEarnings inequalityeconomic efficiencyeconomic policiesemployeeemployer behavioremployer-employee relationshipemployersemploymentemployment contractsemployment dynamicsemployment effectemployment effectsemployment impactemployment impactsemployment levelsEmployment of womenemployment opportunitiesemployment performanceemployment practicesemployment protection legislationemployment protection rulesEmployment ResearchEmployment stabilityEmployment statusequality of opportunityexogenous variablesfamily formationfamily tiesfiringfiring costsfirm entryformal labor markethigh unemploymenthigh unemployment rateshiringhuman capitalimmigrantsimperfect informationincomeincome distributionincome inequalityindustrial relationsindustrializationinformal employmentinformal sectorinformal sector workersinnovationjob creationjob destructionjob lossjob opportunitiesjob performancejob securityjob security regulationsjob tenureJobslabor codeslabor costslabor demandlabor forcelabor force participationlabor lawslabor legislationLabor MarketLabor Market Institutionslabor market outcomelabor market outcomeslabor market performancelabor market regulationlabor market regulationslabor marketslabor productivitylabor productivity growthlabor reallocationlabor regulationslabor relationslabor standardslabor supplylabor turnoverlabourlabour marketlabour market performanceLabour Studieslaid-off workerslayoffslevel of developmentliving standardslong-term unemploymentlow unemploymentlow-income countrieslow-wage employmentmandated benefitsmarket failuresmarket liberalizationminimum wageminimum wagesmultifactor productivitymultifactor productivity growthperfect competitionpermanent employmentpermanent jobspermanent workerpermanent workerspersonnelpolicy implicationsPolicy ResearchPolicy Research Working Paperpolitical economypolitical processpresent valueprimary sourceprivate sectorsproduct marketproduct market regulationsproductivity effectproductivity effectsproductivity growthproductivity levelsprogressquantitative indicatorsquantitative measuresregular contractsrespectrule of lawsafetyseverance arrangementsseverance paymentssocial benefitssocial capitalsocial cohesionsocial inclusionsocial policysocial returnsState Interventionstructural unemploymentsubstitution effectteenage employmentteenagerstemporary employmenttemporary jobstemporary workersterminationtotal factor productivitytrade unionstraining costsunemploymentunemployment insuranceunemployment rateunintended consequencesunion densityunion membershipunion wage premiumunionizationunskilled laborunskilled workersvulnerable groupswage bargainingwage compressionwage differentialswage dispersionwage distributionwage effectwage effectswage floorswage gainswage increaseswage inequalitywage losseswage policieswage premiumwage premiumsWarworkerworkersworking conditionsworking pooryoung peopleyouth employmentyouth laboryouth unemploymentWorld Bank10.1596/1813-9450-6276