Labour Law and Inclusive Development: The Economic Effects of Industrial Relations Laws in Middle-Income Countries

33 Pages Posted: 14 Feb 2014

See all articles by Simon Deakin

Simon Deakin

University of Cambridge - Centre for Business Research (CBR); European Corporate Governance Institute (ECGI); University of Cambridge - Faculty of Law

Colin Fenwick

International Labour Office

Prabirjit Sarkar

University of Cambridge

Date Written: December 2, 2013

Abstract

We use leximetric data coding techniques and panel data econometrics to test for the economic effects of laws governing worker representation and industrial action in the large middle-income countries of Brazil, China, India, Russia and South Africa. We find that more worker-protective laws on employee representation tend to be correlated with higher scores on the Human Development Index. By contrast, in the case of laws on industrial action, some negative effects on human development indicators are reported. Our findings imply that laws supporting employee voice and collective bargaining may have beneficial social effects in middle-income countries. We find no rise in unemployment due to more protective labour laws.

Keywords: Labour Law, Industrial Relations

JEL Classification: J88, K31

Suggested Citation

Deakin, Simon F. and Fenwick, Colin and Sarkar, Prabirjit, Labour Law and Inclusive Development: The Economic Effects of Industrial Relations Laws in Middle-Income Countries (December 2, 2013). University of Cambridge Faculty of Law Research Paper No. 13/2014. Available at SSRN: https://ssrn.com/abstract=2394691 or http://dx.doi.org/10.2139/ssrn.2394691

Simon F. Deakin (Contact Author)

University of Cambridge - Centre for Business Research (CBR) ( email )

Top Floor, Judge Business School Building
Trumpington Street
Cambridge, CB2 1AG
United Kingdom
+ 44 1223 335243 (Phone)

European Corporate Governance Institute (ECGI)

c/o ECARES ULB CP 114
B-1050 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

University of Cambridge - Faculty of Law ( email )

10 West Road
Cambridge, CB3 9DZ
United Kingdom

Colin Fenwick

International Labour Office ( email )

CH-1211 Geneva 22
Switzerland

Prabirjit Sarkar

University of Cambridge ( email )

Centre for Business Research
Cambridge, CB2 1AG
United Kingdom

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