Teaching Labor Laws: Evidence from a Randomized Control Trial in South Africa
- American Economic Journal: Applied Economics (Forthcoming)
We assess whether imperfect knowledge of labor regulation hinders
job creation at small and medium-sized firms. We partner with a
labor law expert that provides information about labor regulation
via newsletters and access to a specialized website. We randomly
assign 1800 firms to get access to this service for a 21-week period.
Six months later, the average employment level at treatment firms
was 12% higher than at control firms. The intervention decreased
the perception that labor regulation is a constraint to hiring and
increased optimal employment level.
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