A/HRC/34/57
in developed countries”,68 while working time and workers’ representation laws appeared to
have negative effects on unemployment.69
45.
The claim that employment protection legislation harms youth unemployment in
particular has been challenged by recent research. For example, reducing costs to lay off
workers neither increases young people’s chances of finding employment nor decreases the
risk of being unemployed.70
46.
Other studies have identified positive effects of labour standards on productivity and
employment. There is a positive long-term relationship of labour legislation, including
regulation protecting workers against dismissal with productivity. 71 Also, fewer working
hours per day reportedly correlates with higher productivity per hour. 72 There have been
similar findings regarding the impact of certain labour laws on innovation. An analysis of
four OECD countries between 1970 and 2002 found that higher dismissal protection
standards had a positive effect on innovations realized by employees. 73
47.
With regard to developing countries, evidence of a negative impact of labour
standards on a country’s economic performance appears to be weak. While relevant data on
developing countries is scarce, research on Argentina, for example, suggests that labour
market deregulation seems to have reduced employment elasticities instead of increasing
them. 74 Meanwhile, evidence on Chile shows that “gradual re-regulation of the labour
market was consistent with continued employment growth up to the Asian Financial Crisis”
in the late 1990s.75 A study analysing data on various countries from 1985 to 1994 found
that higher labour standards correlated with lower levels of corruption, among other
positive effects.76 Finally, a study on BRICS — Brazil, Russian Federation, India, China
and South Africa — suggested that relevant strike laws had no significant effects on
unemployment, while more protective employee representation laws were, in part, even
negatively correlated with unemployment.77
68
69
70
71
72
73
74
75
76
77
16
Ibid., italics by authors.
Simon Deakin, Jonas Malmberg and Prabirjit Sarkar, “How do labour laws affect unemployment and
the labour share of national income? The experience of six OECD countries, 1970-2010”,
International Labour Review, vol. 153, No. 1 (2014), p. 17.
See Clemens Noelke, “The consequences of employment protection legislation for the youth labour
market”, Working Paper No. 144 (Mannheim, Mannheimer Zentrum für Europäische Sozialforschung,
2011), p. 26.
Simon Deakin and Prabirjit Sarkar, “Does labour regulation improve income distribution at the cost
of decreased employment and productivity?”, Paper presented at the ILO/IZA Conference, Geneva,
10-11 March 2016.
See Lonnie Golden, “The effects of working time on productivity and firm performance: a research
synthesis paper”, Conditions of Work and Employment Series No. 33 (ILO Geneva, 2011), p. 6 with
further references.
Viral V. Acharya, Ramin P. Baghai, Krishnamurthy V. Subramanian, “LaborlLaws and innovation”,
Journal of Law & Economics, vol. 56, No. 4 (2013), pp. 998 and 1032.
Adriana Marshall, “Labour market policies and regulations in Argentina, Brazil and Mexico:
programmes and impacts”, Employment Strategy Papers No. 2004/13 (ILO, 2004), p. 22.
Gerry Rodgers, “Labour market flexibility and decent work”, Department of Economic and Social
Affairs Working Paper No. 47 (July 2007), p. 6 with further references.
Thomas I. Palley, “Labour standards, democracy and wages: some cross-country evidence”, Journal
of International Development, vol. 17, No. 7 (2005), pp. 885 and 889.
Simon Deakin, Colin Fenwick, Prabirjit Sarkar, “Labour law and inclusive development: the
economic effects of industrial relations laws in middle-income countries”, in M. Schmiegelow and H.
Schmiegelow, eds. Institutional Competition between Common Law and Civil Law,
(Berlin/Heidelberg, Springer, 2014), p. 202.
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