Family Values and the Regulation of Labor

60 Pages Posted: 15 Feb 2010

See all articles by Alberto F. Alesina

Alberto F. Alesina

Harvard University - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Yann Algan

Universite Paris I Pantheon-Sorbonne - CNRS-EUREQUA; IZA Institute of Labor Economics

Pierre Cahuc

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE); Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA); University of Angers - French National Center for Scientific Research (CNRS); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Paola Giuliano

University of California, Los Angeles (UCLA) - Anderson School of Management; National Bureau of Economic Research (NBER); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Multiple version iconThere are 4 versions of this paper

Abstract

Flexible labor markets require geographically mobile workers to be efficient. Otherwise, firms can take advantage of the immobility of workers and extract monopsony rents. In cultures with strong family ties, moving away from home is costly. Thus, individuals with strong family ties rationally choose regulated labor markets to avoid moving and limiting the monopsony power of firms, even though regulation generates lower employment and income. Empirically, we do find that individuals who inherit stronger family ties are less mobile, have lower wages, are less often employed and support more stringent labor market regulations. There are also positive cross-country correlations between the strength of family ties and labor market rigidities. Finally, we find positive correlations between labor market rigidities at the beginning of the twenty first century and family values prevailing before World War II, which suggests that labor market regulations have deep cultural roots.

Keywords: family values, labor regulation

JEL Classification: E0, P16, Z10, Z13

Suggested Citation

Alesina, Alberto F. and Algan, Yann and Cahuc, Pierre and Giuliano, Paola, Family Values and the Regulation of Labor. IZA Discussion Paper No. 4747, Available at SSRN: https://ssrn.com/abstract=1552681 or http://dx.doi.org/10.2139/ssrn.1552681

Alberto F. Alesina (Contact Author)

Harvard University - Department of Economics ( email )

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Centre for Economic Policy Research (CEPR)

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National Bureau of Economic Research (NBER)

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Yann Algan

Universite Paris I Pantheon-Sorbonne - CNRS-EUREQUA ( email )

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IZA Institute of Labor Economics

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Pierre Cahuc

National Institute of Statistics and Economic Studies (INSEE) - National School for Statistical and Economic Administration (ENSAE) ( email )

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France

Université Paris I Panthéon-Sorbonne - Equipe Universitaire de Recherche en Economie Quantitative (EUREQUA) ( email )

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HOME PAGE: http://eurequa.univ-paris1.fr/membres/cahuc/

University of Angers - French National Center for Scientific Research (CNRS)

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Centre for Economic Policy Research (CEPR)

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United Kingdom

IZA Institute of Labor Economics

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Germany

Paola Giuliano

University of California, Los Angeles (UCLA) - Anderson School of Management ( email )

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United States

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
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United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

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