On-the-job training and rigidity of employment protection in the developing world: Evidence from differential enforcement

The paper circulated with earlier title “Labor Market Regulations and the Investment in Job Training in Developing Countries”. We are very grateful to the editor and the two anonymous referees for extremely useful and detailed comments on earlier drafts. Special thanks go to Pedro Carneiro for several discussions and for Jaime Jesus for research assistance. We also thank the participants in the Employment and Development IZA-World Bank conference (Morocco), especially those of Jean Fares, Nina Pavnick and Joana Silva, participants at the 2008 annual meetings of the European Economic Association (Universita Bocconi, Milan), participants at the 2008 annual meetings of the European Association of Labor Economists (Amsterdam), and participants in a World Bank Brown Bag session, especially Mary Hallward-Driemier. We are also grateful to Carmen Pagés for sharing with us the job reallocation data used in Micco and Pagés (2007) and originally used in Davis and Haltiwanger (1999). This project would not have been possible without the financial support of the World Bank Research Support Grant granted to Rita Almeida. The findings expressed in this paper are those of the authors and do not necessarily represent the views of the World Bank.