Who Demands Labour (De)Regulation in the Developing World? Insider–Outsider Theory Revisited

25 Pages Posted: 31 Dec 2019

See all articles by Lucas Ronconi

Lucas Ronconi

Centro de Investigación y Acción Social & CONICET

Ravi Kanbur

Cornell University; Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics

Santiago López-Cariboni

University of the Republic (Uruguay)

Abstract

Contrary to the predictions of the insider–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 insider–outsider model, discussing their empirical relevance in a developing country context.

Keywords: informal, labour, segmentation, monopsony, fairness

JEL Classification: J4, J8, O17

Suggested Citation

Ronconi, Lucas and Kanbur, Ravi and López-Cariboni, Santiago, Who Demands Labour (De)Regulation in the Developing World? Insider–Outsider Theory Revisited. IZA Discussion Paper No. 12831. Available at SSRN: https://ssrn.com/abstract=3510442

Lucas Ronconi (Contact Author)

Centro de Investigación y Acción Social & CONICET ( email )

Av. Callao 542
Buenos Aires, 1022
Argentina

Ravi Kanbur

Cornell University ( email )

301-J Warren Hall
Ithaca, NY 14853
United States
607-255-7966 (Phone)
607-255-9984 (Fax)

HOME PAGE: http://www.kanbur.dyson.cornell.edu

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

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

Santiago López-Cariboni

University of the Republic (Uruguay) ( email )

Av. 18 de Julio 1824-1850
11200 Montevideo
Uruguay

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