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Abstract
This paper provides, to our knowledge for the first time, cross-country measures of
enforcement of labor law across almost every country in the world. The distinction between de
jure and de facto regulation is well understood in theory, but almost never implemented in crosscountry
empirical work because of lack of data. As a result, influential papers like the one by
Botero et. al. (2004) published in the Quarterly Journal of Economics, which have shaped the
policy debate by finding strong negative consequences of labor regulation on labor market
outcomes, are based entirely on measures of de jure stringency of regulations. We show that this
neglect of regulation enforcement matters. There is, on average, a negative correlation between
the stringency of labor regulation and the intensity of its enforcement. The strong results of
Botero et. al. (2004) on the consequences of labor regulation, and the hypotheses of La Porta et.
al (2008) on the legal origin theory of regulation stringency, no longer hold for effective labor
regulation.