Labor market institutions and income inequality: An empirical exploration

César Calderón, Alberto Chong

Research output: Contribution to journalArticle in a journalpeer-review

34 Scopus citations


This paper presents evidence on the impact of labor regulations on income inequality using a recently published database on labor institutions and outcomes as well as different panel data analysis techniques for a large sample of countries for 1970-2000. When applying our preferred technique we find that both de jure and de facto regulations improve the distribution of income although the former appear to be non-robustly associated with improving income inequality. This result partly reflects the fact that regulations are endogenous and, more interestingly, that different regulation yield distinct effects.
Original languageEnglish
Pages (from-to)65-81
Number of pages17
JournalPublic Choice
Issue number1-2
StatePublished - 1 Jan 2009
Externally publishedYes


  • GMM-IV
  • Income inequality
  • Labor laws
  • Long-run
  • Regulation
  • Rigidity


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