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Alesina, A., Algan, Y., Cahuc, P., Giuliano, P. (2015). Family values and the regulation of labor. Journal of the European Economic Association 13(4), 599-630.

To be efficient, flexible labor markets require geographically mobile workers. Otherwise firms can take advantage of workers' immobility and extract rents at their expense. In cultures with strong family ties, moving away from home is costly. Thus, to limit the rents of firms and to avoid moving, individuals with strong family ties rationally choose regulated labor markets, even though regulation generates higher unemployment and lower incomes. Empirically, we find that individuals who inherit stronger family ties are less mobile, have lower wages and higher unemployment, and support more stringent labor market regulations. We find a positive association between labor market rigidities at the beginning of the 21st century and family values prevailing before World War II, and between family structures in the Middle Ages and current desire for labor market regulation. Both results suggest that labor market regulations have deep cultural roots.

Authors

Alesina, Alberto

Alberto Alesina, born in Italy in 1957, is the Nathaniel Ropes Professor of Political Economy at Harvard University. He served as Chairman of the Department of Economics from 2003 - 2006. He obtained his Ph.D. from Harvard in 1986. He is also a member of the National Bureau of Economic Research...

Algan, Yann

Yann Algan is Professor of Economics at Sciences Po Paris. He is affiliated to CEPR, IZA and CEPREMAP (Co-head Macroeconomic program). Awards and grants European Starting Grant (ERC) 2010-2014 - Project "Trust" Best French Young Economist 2009 Best French economic book and...

Cahuc, Pierre

Pierre Cahuc is Professor of Economics Ecole Polytechnique and Research fellow CREST-INSEE, IZA,CEPR Selected publications Is short-time work a good method to keep unemployment down? with Stéphane Carcillo, forthcoming in the Nordic Economic Policy Review Civil Society and...

Giuliano, Paola

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