Copyright (c) 2009 All rights reserved. http://works.bepress.com/david_kaplan Recent documents in David S. Kaplan en-us Thu, 29 Oct 2009 09:07:22 PDT 3600 http://works.bepress.com/david_kaplan/16 http://works.bepress.com/david_kaplan/16 Fri, 23 Oct 2009 10:39:37 PDT We analyze the outcomes of 128 cases from a labor court in Mexico in which a judge awarded money to a plaintiff who claimed to have been fired from a firm without cause. The judgment was enforced in only 44% of the cases. A plaintiff may try to enforce a judgment by petitioning the court to seize the firm's assets when the firm refuses to pay. Half of the enforced judgments required at least one seizure attempt. We estimate the parameters of post judgment games in which the worker does not know if a seizure attempt would ultimately succeed and show that these models explain the data well. We then simulate the effects of a policy that reduces worker costs of a seizure attempt. We find that this policy would increase the probability of enforcement, either by increasing the probability that the worker attempts an asset seizure or by inducing firms to pay voluntarily to avoid such seizure attempts. However, reducing worker costs of seizure attempts can only have a modest effect on enforcement probabilities because seizure attempts are often unsuccessful. David S. Kaplan Empirical Studies of Litigation and Settlement http://works.bepress.com/david_kaplan/15 http://works.bepress.com/david_kaplan/15 Tue, 01 Sep 2009 12:12:22 PDT This paper draws on a new combination of employer-employee and plant-level data from Mexico to investigate the relationship between exports and wage premia, defined as wages above what workers would receive elsewhere in the labor market. We first use detailed information on individual workers' wage histories to decompose plant-level average wages into a component reflecting skill composition and a component reflecting wage premia. Our estimating procedure allows for changes in the return to ability and feedback from current idiosyncratic shocks to future mobility. We then use the peso devaluation of late 1994, which we argue generated an exogenous differential inducement to export within industries, to estimate the eect of export incentives on the two components. Comparing across plants within industries, we find that approximately two-thirds of the higher level of wages in larger, more productive plants is explained by higher levels of wage premia, and that nearly all of the differential within-industry wage change due to the export shock is explained by changes in wage premia. The findings argue against the hypothesis that sorting on individual ability is solely responsible for the well-documented correlation between exporting and wages. Judith A. Frķas Wage Determination http://works.bepress.com/david_kaplan/14 http://works.bepress.com/david_kaplan/14 Mon, 31 Aug 2009 04:30:05 PDT This paper uses data gathered by the authors from the archives of a local labor court in the State of Mexico to study the effects of overtime claims on lawsuit outcomes. Labor law in Mexico dictates that labor courts must record the amounts of compensation in all pre-trial settlements. This allows us to measure the impact of strategies chosen by the parties on all lawsuit outcomes, including settlement. In particular, this paper focuses on the plaintiff (employee)'s choice of overtime claim as part of her total claim. Overtime claims are generally unverifiable, particularly because firms that are sued in this court tend to be small or medium-sized firms that do not have formal time-keeping procedures. In addition, labor jurisprudence indicates that judges in labor courts should evaluate unverified overtime claims conservatively, that is they should not recognize unreasonable amounts of overtime. We find that these overtime claims, although often large enough to be considered unreasonable, do affect court rulings, making them more favorable to workers. In addition, in cases that settle, workers whose cases are handled by private lawyers tend to receive higher payments as their claims contain relatively more overtime, while workers whose cases are handled by public lawyers tend to receive lower payments as their claims contain relatively more overtime. This may indicate that private and public lawyers choose very different strategies in relation to the amount of overtime claimed, but may also reflect the selection effect of lawyer type, that is the fact that cases going to public lawyers tend to be different, in both observable and unobservable ways, from cases going to private lawyers. Alexander Gotthard Empirical Studies of Litigation and Settlement http://works.bepress.com/david_kaplan/13 http://works.bepress.com/david_kaplan/13 Fri, 21 Aug 2009 12:07:38 PDT Perceptions-based indicators are sometimes used to measure the quality of the business environment. For instance, firms are asked about the major constraints on business operations and expansion. Little is known, however, about what shapes their responses. In this paper, using perceptions-based indicators from 38 countries and 84 years from the World Bank Enterprise Surveys, we argue that firm responses are critically influenced by macroeconomic conditions. Paradoxically, we find that perceptions worsen during periods of high GDP growth. We also examine other indicators from the Enterprise Surveys which are objective measures of constraints and find that the objectives measures remain unchanged during high-growth years. We conclude that changes in firms' perceptions over time may not reflect changes in the business environment. David S. Kaplan Measurement of Institutions http://works.bepress.com/david_kaplan/12 http://works.bepress.com/david_kaplan/12 Wed, 10 Dec 2008 08:28:27 PST Because of protective labor laws, many firms will find it too costly to fire workers in spite of the difficult times. In this sense, the labor laws will be partially successful in protecting existing jobs.On the other hand, firms will not be hiring either. Labor markets in the region will essentially freeze. Workers who have jobs will hold on to them, often to the detriment of productivity. Those who are looking for jobs will not find them, unless they are willing to work in the lower-paid informal sector.The absence of labor mobility will prevent labor markets from making necessary adjustments and will prolong the negative effects of the crisis. Instead of trying to protect jobs through measures such as high severance payments, countries in the region might try to protect workers through unemployment insurance. Unemployment insurance provides social protection without restricting worker mobility and without hampering labor productivity. The implementation of unemployment insurance would be challenging, but the potential benefits are enormous.The World Bank's Doing Business project presents a ranking of labor market flexibility. Bolivia and Venezuela have inflexible labor markets and will likely feel the effects of the crisis for years to come. Colombia and Chile have comparatively flexible labor markets and should recover more quickly. Chile, which offers modest unemployment insurance, may offer the best social protection as well. David S. Kaplan Labor-Market Rigidities http://works.bepress.com/david_kaplan/11 http://works.bepress.com/david_kaplan/11 Tue, 15 Jul 2008 07:56:04 PDT This paper studies the effects of labor-regulation reform using data for 10,396 firms from 14 Latin American countries. Firms are asked both how many permanent workers they would have hired and how many they would have terminated if labor regulations were made more flexible. I find that making labor regulations more flexible would lead to an average net increase of 2.08 percent in total employment. Firms with fewer than 20 employees would benefit the most, with average gains in net employment of 4.27 percent. Countries with more regulated labor markets would experience larger gains in total employment. These larger gains in total employment, however, would be achieved through higher rates of hiring and higher rates of termination. These results may explain why there is substantial opposition to labor reforms despite the predicted gains in efficiency and total employment. David S. Kaplan Worker and Job Flows http://works.bepress.com/david_kaplan/10 http://works.bepress.com/david_kaplan/10 Tue, 11 Dec 2007 13:05:51 PST Using a census of all workers in private establishments in the formal sector in Mexico to track workers and establishments over time, this paper presents the first Mexican worker and job flow statistics. The data allow for comparing these flows across time, space, and worker characteristics. Although many patterns are similar to those documented in developing countries, the analysis uncovers patterns that have potentially important policy implications. The authors compare the results to the literature, illustrate how the statistics change during times of reform and crisis, and present novel findings that contribute to the broader literature on worker reallocations. David S. Kaplan Worker and Job Flows http://works.bepress.com/david_kaplan/9 http://works.bepress.com/david_kaplan/9 Thu, 06 Dec 2007 14:49:09 PST We analyze lawsuits involving publicly-appointed lawyers in a labor court in Mexico to study how a rigid law is enforced. We show that, even after a judge has awarded something to a worker, the award goes uncollected 56% of the time due to the highly formalistic nature of the enforcement process. Workers with more than seven years of tenure, however, do not leave these awards uncollected because their legally-mandated severance payments are larger. Differences in the probability of receiving compensation after trial, both across lawyers and across workers with different levels of tenure, are not due to differences in win rates at trial. These differences in the probability of receiving compensation are entirely attributable to post-trial differences in the probability of enforcing the judgment. Hence we show how excessive legal formalism generates ineffective and inconsistent enforcement. To better explain these facts, we develop a simple model of litigation that includes costs of collecting awards. Observed differences in lawsuit outcomes across lawyers are consistent with the predictions our model, in which firms take advantage of plaintiffs who either have bad information or are unwilling to undertake the costly task of enforcing a judgment. David S. Kaplan Empirical Studies of Litigation and Settlement http://works.bepress.com/david_kaplan/8 http://works.bepress.com/david_kaplan/8 Tue, 12 Jun 2007 13:41:27 PDT We study a channel through which inflation can have effects on the real economy. Using job creation and destruction data from U.S. manufacturing establishments from 1973-1988, we show that both jobs created by new establishments and jobs destroyed by dying establishments are negatively correlated with inflation. These results are robust to controls for the real-business cycle and monetary policy. Over a longer time frame, data on business failures confirm our results obtained from job creation and destruction data. We show that a financial-markets explanation and a nominal-wage rigidities explanation are both consistent with our empirical evidence. Gaetano Antonolfi Worker and Job Flows http://works.bepress.com/david_kaplan/7 http://works.bepress.com/david_kaplan/7 Sun, 08 Apr 2007 16:27:37 PDT We estimate the effect on business start-ups of a program that significantly speeds up firm registration procedures. The program was implemented in Mexico in different municipalities at different dates. Our estimates suggest that new start-ups increased by about 5% per month in eligible industries, and we present evidence that this is a causal effect. Most of the effect is temporary, concentrated in the first 15 months after implementation. The effect is robust to several specifications of the benchmark control group, to the inclusion of different time trends, and to the use of different samples. The estimated effect is much smaller than World Bank estimates for other countries and the effect stated by Mexican authorities. David S. Kaplan Worker and Job Flows