Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru
The impact of employment protection legislation has been thoroughly analyzed in varied contexts. Most studies highlight the potential harm of the legislation on labor outcomes, although evidence remains inconclusive. However, the literature has focused primarily on ex post impacts, analyzing the reg...
| Main Authors: | , , |
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| Format: | Article |
| Language: | English |
| Published: |
Cambridge University Press
2023-12-01
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| Series: | Latin American Research Review |
| Subjects: | |
| Online Access: | https://www.cambridge.org/core/product/identifier/S1542427823000196/type/journal_article |
| _version_ | 1827595906262761472 |
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| author | Gustavo Yamada Pablo Lavado Gonzalo Rivera |
| author_facet | Gustavo Yamada Pablo Lavado Gonzalo Rivera |
| author_sort | Gustavo Yamada |
| collection | DOAJ |
| description | The impact of employment protection legislation has been thoroughly analyzed in varied contexts. Most studies highlight the potential harm of the legislation on labor outcomes, although evidence remains inconclusive. However, the literature has focused primarily on ex post impacts, analyzing the regulation’s effect after implementation. This article departs from that analysis to focus on anticipated or ex ante effects of labor regulation. More specifically, we study the role of firms’ expectations in future stricter labor legislation related to employment and income in Peru’s formal and informal labor market. To account for expectations, we used the number of news items related to the approval of a proposed law—the General Labor Law—to increase labor rigidities in Lima’s most important business newspaper. Using the Peruvian labor survey, we find a negative but decreasing relationship between firms’ expectations of a future stricter labor market and employment and average income. We also collect evidence that bigger news items and ones closer to the front page have a negative relationship with formal employment and income. |
| first_indexed | 2024-03-09T03:01:35Z |
| format | Article |
| id | doaj.art-0a192f2c209744518f5d8f5c5bb243ed |
| institution | Directory Open Access Journal |
| issn | 1542-4278 |
| language | English |
| last_indexed | 2024-03-09T03:01:35Z |
| publishDate | 2023-12-01 |
| publisher | Cambridge University Press |
| record_format | Article |
| series | Latin American Research Review |
| spelling | doaj.art-0a192f2c209744518f5d8f5c5bb243ed2023-12-04T13:13:24ZengCambridge University PressLatin American Research Review1542-42782023-12-015887589110.1017/lar.2023.19Fear of Labor Rigidities: The Role of Expectations on Employment Growth in PeruGustavo Yamada0Pablo Lavado1https://orcid.org/0000-0002-3872-216XGonzalo Rivera2Universidad del Pacífico, Lima, PeruUniversidad del Pacífico, Lima, PeruYale University, New Haven, CT, USAThe impact of employment protection legislation has been thoroughly analyzed in varied contexts. Most studies highlight the potential harm of the legislation on labor outcomes, although evidence remains inconclusive. However, the literature has focused primarily on ex post impacts, analyzing the regulation’s effect after implementation. This article departs from that analysis to focus on anticipated or ex ante effects of labor regulation. More specifically, we study the role of firms’ expectations in future stricter labor legislation related to employment and income in Peru’s formal and informal labor market. To account for expectations, we used the number of news items related to the approval of a proposed law—the General Labor Law—to increase labor rigidities in Lima’s most important business newspaper. Using the Peruvian labor survey, we find a negative but decreasing relationship between firms’ expectations of a future stricter labor market and employment and average income. We also collect evidence that bigger news items and ones closer to the front page have a negative relationship with formal employment and income.https://www.cambridge.org/core/product/identifier/S1542427823000196/type/journal_articleexpectationsnewsfiring costunemploymentexpectativasnoticiascosto de despidodesempleo |
| spellingShingle | Gustavo Yamada Pablo Lavado Gonzalo Rivera Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru Latin American Research Review expectations news firing cost unemployment expectativas noticias costo de despido desempleo |
| title | Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru |
| title_full | Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru |
| title_fullStr | Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru |
| title_full_unstemmed | Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru |
| title_short | Fear of Labor Rigidities: The Role of Expectations on Employment Growth in Peru |
| title_sort | fear of labor rigidities the role of expectations on employment growth in peru |
| topic | expectations news firing cost unemployment expectativas noticias costo de despido desempleo |
| url | https://www.cambridge.org/core/product/identifier/S1542427823000196/type/journal_article |
| work_keys_str_mv | AT gustavoyamada fearoflaborrigiditiestheroleofexpectationsonemploymentgrowthinperu AT pablolavado fearoflaborrigiditiestheroleofexpectationsonemploymentgrowthinperu AT gonzalorivera fearoflaborrigiditiestheroleofexpectationsonemploymentgrowthinperu |