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Even though the existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that labor market regulation is exogenous to immigration (in terms of both size and composition), this is not necessarily the case. This paper shows that labor market regulation responds to the composition of the immigrant population. We build a novel workers' protection index based on 36 labor law variables over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we find that workers' protection in destination countries is influenced by the degree of workers' protection that immigrants experience in their origin countries and is not affected by immigrant population size. The effects are particularly strong across two dimensions of workers' protection: worker representation laws and employment forms laws. This paper provides suggestive evidence that immigrants' participation in unions and its implications for political actors is one of the potential mechanisms. Finally, calculations based on the estimated coefficients suggest that immigration, on average, contributes to a reduction in workers' protection, particularly in OECD high-income countries.

Even though the existing literature investigating the labor market impact of immigration assumes, implicitly or explicitly, that labor market regulation is exogenous to immigration (in terms of both size and composition), this is not necessarily the case. This paper shows that labor market regulation responds to the composition of the immigrant population. We build a novel workers' protection index based on 36 labor law variables over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel setting using both internal and external instruments, we find that workers' protection in destination countries is influenced by the degree of workers' protection that immigrants experience in their origin countries and is not affected by immigrant population size. The effects are particularly strong across two dimensions of workers' protection: worker representation laws and employment forms laws. This paper provides suggestive evidence that immigrants' participation in unions and its implications for political actors is one of the potential mechanisms. Finally, calculations based on the estimated coefficients suggest that immigration, on average, contributes to a reduction in workers' protection, particularly in OECD high-income countries.

We empirically investigate the impact of access to justice (ATJ) on GDP per capita growth in a panel of 83 countries from 1970 to 2014. Our analysis relies on a new database documenting the number of judges per capita as a proxy for capturing the cross-country evolution of ATJ. The proxy measures the extent to which disputes between economic actors can be resolved at a relatively low cost, without dysfunctional delay and discrimination. In a dynamic panel setting using internal instruments, we find that increasing ATJ by 1% increases the five-year growth rate of GDP per capita by 0.86 p.p. (0.17 p.p. annually) with diminishing marginal returns. In line with the diminishing marginal returns argument, we find that the effect of ATJ is two times smaller in Europe compared to other regions due to higher levels of ATJ. We find no evidence of a differential effect of ATJ across other regions, income levels, legal origins, democracy, corruption of the judicial system or human capital levels.

We empirically investigate the impact of access to justice (ATJ) on GDP per capita growth in a panel of 83 countries from 1970 to 2014. Our analysis relies on a new database documenting the number of judges per capita as a proxy for capturing the cross-country evolution of ATJ. The proxy measures the extent to which disputes between economic actors can be resolved at a relatively low cost, without dysfunctional delay and discrimination. In a dynamic panel setting using internal instruments, we find that increasing ATJ by 1% increases the five-year growth rate of GDP per capita by 0.86 p.p. (0.17 p.p. annually) with diminishing marginal returns. In line with the diminishing marginal returns argument, we find that the effect of ATJ is two times smaller in Europe compared to other regions due to higher levels of ATJ. We find no evidence of a differential effect of ATJ across other regions, income levels, legal origins, democracy, corruption of the judicial system or human capital levels.

Even though the current literature investigating the labor market impact of immigration assumes implicitly or explicitly labor market regulation as exogenous to immigration (both in terms of size and composition), this is not necessarily the case. This paper shows that the composition of the immigrant population affects, in the medium and long-run, the labor market regulation. We build a new workers protection index based on 36 labor law variables over a sample of 70 developed and developing countries from 1970 to 2010. Exploiting a dynamic panel set- ting using both internal and external instruments, we find that migrants impact the destination countries' workers protection mainly through the degree of workers protection experienced in their origin countries, captured by an "epidemiological" effect. On the other hand, the size of the immigrant population has a small and rather insignif- icant effect. The results are robust to alternative and competing immigration effects such as diversity, polarization and skill-selection. The effects are particularly strong across two dimensions of the workers protection index: worker representation laws and employment forms laws. This paper provides suggestive evidence that immigrants' participation to unions and its implications for the political actors is one of the potential mechanisms through which the epidemiological effect could materialize. Finally, calculations based on the estimated coefficients suggest that immigration contributes to a reduction of the degree of workers protection, particularly in OECD high-income countries.