The quality of the legal system and labor market performance around the world

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Using data on 75 countries for six years in the period 1995-2003, this paper analyzes empirically whether and to what extent the quality of the legal system affects the performance of the labor market. According to the regression results, a legal system characterized by a dependent judiciary, biased courts, a lack of intellectual property protection and a lack of integrity increases unemployment and lowers the employment level. The magnitude of the effect seems to be substantial, particularly among young people.
Original languageEnglish
Pages (from-to)39-65
Number of pages27
JournalEuropean Journal of Law and Economics
Issue number1
Publication statusPublished - 2009


  • Rule of law
  • Unemployment
  • Legal system
  • Employment

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