
Contents
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6.1 Introduction 6.1 Introduction
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6.2 Institutional Background 6.2 Institutional Background
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6.2.1 Employment Legislation 6.2.1 Employment Legislation
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Legal Framework for Individual Contracts Legal Framework for Individual Contracts
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Collective Labor Laws Collective Labor Laws
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Social Security Social Security
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6.2.2 Informality 6.2.2 Informality
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6.3 The Effects of Labor Market Regulations: Evidence from Household Microdata 6.3 The Effects of Labor Market Regulations: Evidence from Household Microdata
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6.3.1 Who “Benefits” from Regulations? 6.3.1 Who “Benefits” from Regulations?
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6.3.2 Effects on Earnings 6.3.2 Effects on Earnings
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Econometric Problems Econometric Problems
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Econometric Specification Econometric Specification
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The Model The Model
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The Data The Data
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6.4 Labor Demand Estimation 6.4 Labor Demand Estimation
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6.4.1 The Model 6.4.1 The Model
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6.4.2 Econometric Specification 6.4.2 Econometric Specification
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6.4.3 The Data 6.4.3 The Data
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The Index of Regulations Construction The Index of Regulations Construction
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6.4.4 Results 6.4.4 Results
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Robustness Robustness
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6.4.5 Dynamics: The Speed of Adjustment 6.4.5 Dynamics: The Speed of Adjustment
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6.5 Concluding Remarks 6.5 Concluding Remarks
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Appendix A Appendix A
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Appendix B Permanent Household Survey Appendix B Permanent Household Survey
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Appendix C INDEC Industrial Survey: Methodology Appendix C INDEC Industrial Survey: Methodology
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Calculation Procedure Calculation Procedure
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References References
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6 The Effects of Labor Market Regulations on Employment Decisions by Firms: Empirical Evidence for Argentina
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Published:October 2004
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Abstract
In Argentina, workers have historically enjoyed strong job rights (including a right to advanced layoff notice and to severance payments). During the 1990s, and following the rapid growth in unemployment, these regulations came under attack. This chapter provides some evidence on these issues. It exploits a panel data set that covers over 1,300 manufacturing firms for the period 1990–1996. The panel provides information on employment and hours worked, as well as overtime, wages, and physical production. The next section presents some selected institutional features of Argentina's labor market that focus on job security regulations and payroll taxes. The next section considers two important descriptive issues: Who benefits from regulations, and how much do they cost? The evidence is based on Permanent Household Survey (PHS) microdata and identifies the effects on individuals' labor market outcomes stemming from varying regulations. The firm-level dynamic labor demand estimation is also looked into. The chapter then documents the dynamic responsiveness of employment and hours to changes in output and labor costs at the firm level. The last section concludes.
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