IZA DP No. 2381: Politico-Economic Causes of Labor Regulation in the United States: Rent Seeking, Alliances, Raising Rivals' Costs (Even Lowering One's Own?), and Interjurisdictional Competition
published in: R. Vaubel and P. Bernholz (eds.), Political Competition and Economic Regulation, London: Routledge 2007
This paper offers an eclectic survey of the political economy of labor regulation in the United States at federal and state levels along the dimensions of occupational health and safety, unjust dismissal, right-to-work, workplace safety and workers’ compensation, living wages, and prevailing wages. We discuss rent seeking/predation, coalition formation, judicial review, and interjurisdictional competition as well as the implications of union decline. Our analysis should help dispel any notion that the U.S. labor market is unregulated while also indicating that the political process shows some sensitivity to benefits and costs.