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

26 Pages Posted: 14 Jan 2020

See all articles by Ravi Kanbur

Ravi Kanbur

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

Santiago López-Cariboni

University of the Republic (Uruguay)

Lucas Ronconi

Centro de Investigación y Acción Social & CONICET

Date Written: January 2020

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: Fairness, informal, Labour, monopsony, Segmentation

JEL Classification: J4, J8, O17

Suggested Citation

Kanbur, Ravi and López-Cariboni, Santiago and Ronconi, Lucas, Who Demands Labour (De)Regulation in the Developing World? Insider–Outsider Theory Revisited (January 2020). CEPR Discussion Paper No. DP14277. Available at SSRN: https://ssrn.com/abstract=3518618

Ravi Kanbur (Contact Author)

Cornell University ( email )

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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

Lucas Ronconi

Centro de Investigación y Acción Social & CONICET ( email )

Av. Callao 542
Buenos Aires, 1022
Argentina

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