International Immigration and Labor Regulation

68 Pages Posted: 19 Apr 2024

See all articles by Adam Levai

Adam Levai

Luxembourg Institute of Socio-Economic Research (LISER)

Riccardo Turati

Universitat Autonoma de Barcelona

Abstract

The existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that the law or labor regulation is exogenous to immigration. To test this assumption, we build a novel workers' protection measure based on 36 labor law variables that capture labor regulation over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we establish a new result: immigrants' norms and experience of labor regulation influence the evolution of host countries labor law regulation. This effect is particularly strong for two components of workers' protection: worker representation laws and employment forms laws. Our main results are consistent with suggestive evidence on the transmission of preferences from migrants to their offspring (vertical transmission), and from migrants to natives or local political parties (horizontal transmission). Finally, we find that the size of the immigrant population per se has a small and negligible impact on host country labor market regulation.

Keywords: international migration, labor market institutions, labor regulation, legal transplants

JEL Classification: J61, K31, F22

Suggested Citation

Levai, Adam and Turati, Riccardo, International Immigration and Labor Regulation. IZA Discussion Paper No. 16929, Available at SSRN: https://ssrn.com/abstract=4800266 or http://dx.doi.org/10.2139/ssrn.4800266

Adam Levai (Contact Author)

Luxembourg Institute of Socio-Economic Research (LISER) ( email )

11, Porte des Sciences
Campus Belval – Maison des Sciences Humaines
Esch-sur-Alzette, L-4366
Luxembourg

Riccardo Turati

Universitat Autonoma de Barcelona ( email )

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