Labour Market Impact Assessments Compliance And Enforcement

This study shines new light on an ongoing debate about the extent to which discouraging enforcement activities are necessary to make regulated actors comply with government regulations. Specifically, it evaluates a long-standing but essentially unenforced regulation that mandated employers in Sweden to post their vacancies at the Public Employment Service (PES) to improve matching and the labor market prospects of disadvantaged workers. Using comprehensive vacancy data from the PES, it tests whether the regulation-despite not being enforced-influenced employers' vacancy posting behavior in the period prior to its partial repeal in 2007. Exploiting the fact that the repeal did not apply to employers in the central government sector, the difference-indifferences analyses conducted in this study identify a substantial and significant negative effect of repealing the unenforced law on employers' vacancy posting behavior, under reasonable assumptions. This finding is at odds with standard deterrence models of regulatory compliance and hints at an important role for organizational factors related to cultures and norms. A supplementary analysis of heterogeneous effects among local government employers investigates to what extent some organizational factors are correlated to compliance with the unenforced regulation.

Regulating for Decent Work is a response to the dominant deregulatory approaches that have shaped labour market regulation in recent years. The inter-disciplinary and international approach invigorates current debates through the identification of new challenges, subjects and perspectives.

Nearly half of trade agreements concluded in the past five years included either a labor chapter or labor provision that makes reference to international labor standards and ILO instruments. The evidence so far suggests that labor provisions have been an important tool for raising awareness and improving laws and legislations with respect to workers' rights, increasing stakeholder involvement in negotiation and implementation phases, and developing domestic institutions to better monitor and enforce labor standards. But challenges remain, particularly with respect to sustainability of impacts, coherence, and cooperative efforts. This new report, part of the Studies on Growth with Equity series, gives a full examination of the scope and effectiveness of these labor provisions.