Labor Regulations and the Cost of Corruption: Evidence from the Indian Firm Size Distribution

• 成果类型: Article
• 署名作者: Amirapu, Amrit; Gechter, Michael
• 署名单位: University of Kent; Pennsylvania Commonwealth System of Higher Education (PCSHE); Pennsylvania State University; Pennsylvania State University - University Park
• 刊物名称: REVIEW OF ECONOMICS AND STATISTICS
• ISSN/ISSBN: 0034-6535
• DOI: 10.1162/rest_a_00837
• 发表日期: 2020-03
• 页码: 34-48
• 关键词: employment; elasticities; performance; demand; LAW

摘要

In this paper, we estimate the costs associated with an important suite of labor regulations in India by taking advantage of the fact that these regulations apply only to firms above a size threshold. Using distortions in the firm size distribution together with a structural model of firm size choice, we estimate that the regulations increase firms' unit labor costs by 35%. This estimate is robust to potential misreporting on the part of firms and enumerators. We also document a robust positive association between regulatory costs and exposure to corruption, which may explain why regulations appear to be so costly in developing countries.