I assess the long‐run implications for children of growing up in a unilateral divorce environment, which increases the ease of divorce by not requiring the explicit consent of both partners. Using 40 years of census data to exploit the variation across states and over time in changes in divorce regulation, I confirm that unilateral divorce regulations do significantly increase the incidence of divorce. Adults who were exposed to unilateral divorce regulations as children are less well educated, have lower family incomes, marry earlier but separate more often, and have higher odds of adult suicide

Leisure externalities across households have important implications for labor market regulations but have proven very difficult to identify. This paper exploits the unique features of school holidays and paid leave regulations in France to show that exogenous increases in the amount of leisure time enjoyed by workers living with children induce very significant increases in the demand for leisure of workers living in other households. We also provide evidence that these cross effects are driven by complementarities in nonmarket time rather than workplace norms or workplace externalities

This article develops a model of noncompetitive labor markets in which high-wage (good) and low-wage (bad) jobs coexist. Minimum wages and unemployment benefits shift the composition of employment toward high-wage jobs. Because the composition of jobs in the laissez-faire equilibrium is inefficiently biased toward low-wage jobs, these labor market regulations increase average labor productivity and may improve welfare

Ecuadorian labor costs are said to be high because of the existence of many mandated benefits. Using the 1994 Living Standards Measurement Survey, we show that the effect of these benefits is actually mitigated by a reduction of base earnings, that is, of the foundation on which they are paid. The reduction is larger in the private than in the public sector and is negligible for unionized workers. We also show that, in spite of mandated benefits, interindustry wage differentials are comparable to those of Bolivia, a country characterized by “flexible” labor markets but otherwise similar to Ecuador.

This study explores corporate responses to 1993 legislation that capped the corporate tax deductibility of top management compensation not qualified as “performance‐based.” Our analysis suggests that the cap may have created a focal point for salary compensation but had little effect on total compensation levels or growth rates at firms likely to be affected by the limit. There is little evidence that the policy significantly increased the performance sensitivity of chief executive officer (CEO) pay at affected firms. We conclude that corporate pay decisions have been relatively insulated from this policy intervention.

This paper investigates social preferences over employment protection regulation in a general equilibrium model of dynamic labor demand and sheds some light on the comparative dynamics of Eurosclerosis. When firing costs are low, a transition to a rigid labor market is favored by all the employed workers with idiosyncratic productivity below some threshold; when their status quo level is high, preserving a rigid labor market is favored only by the employed with intermediate productivity. A more volatile environment and a lower rate of productivity growth increase the political support for labor market rigidity only in high-rents economies

This article examines the extent to which agency theory may explain chief executive officer (CEO) compensation in Chinese state‐owned enterprises during the 1980s. We find support for the agency theory: CEO pay sensitivity decreases with the variance of performance. Moreover, the performance sensitivity of CEO pay increases with the marginal return to executive action. While the elasticity of pay to sales is slightly smaller than that found for conventional firms in the West generally, our estimate of the semielasticity of pay with respect to profitability is comparable with estimates for regulated industries in the United States

The Immigration Reform and Control Act of 1986 (IRCA) represents an attempt to use labor market regulation to control illegal migration into the United States by imposing fines on employers who hire unauthorized workers. Sanctions lower wages directly because they act as a tax on hiring additional workers. In addition, IRCA legalized many longtime illegal aliens. Legalization affects wages by changing the relative supply of authorized and unauthorized workers. This study estimates IRCA's impact on wages of manufacturing production workers in metropolitan areas and finds small but statistically significant effects: sanctions lower wages, while legalization raises them

This article presents estimates of the elasticity of supply of labor to child care. This parameter is an important determinant of the effects of child care subsidies and regulations on the cost of child care. Using data from the Current Population Survey, there is evidence of an elasticity in the range of 1.2-1.9. This implies that the majority of the benefits of child care subsidies accrue to consumers of child care. It is also consistent with the fact that child care workers' wages remained flat in real terms in recent years, despite rapid growth in the demand for child care