Economic Freedom, Social Structure, and Dynamic Effects of Country-Level Employment and Labor Law Regulatory Institutions

Abstract

This study examined employment and labor law regulatory institutions in different countries, comparing neoclassical economics and neo-institutionalism. Analyses across 117 countries showed laws restricting alternative forms of employment were associated with increased standards of living, humanitarian development, innovation, voice, and accountability. Laws restricting working hours or dismissals had the opposite effects. Laws facilitating union membership or industrial action increased voice and accountability.  Managerial relevance is explained. Theoretical, practical, and policy implications are provided.