The Use of Quantitative Methods in Labour Law Research
| Published date | 01 August 2018 |
| DOI | 10.1177/0964663918760385 |
| Date | 01 August 2018 |
| Subject Matter | Articles |
Article
The Use of Quantitative
Methods in Labour Law
Research: An Assessment
and Reformulation
Simon Deakin
University of Cambridge, UK
Abstract
This article considers the potential and limits of quantitative approaches to labour law
research. It explores the methods used to construct and validate indicators of labour
regulation (‘leximetrics’) and those used in the econometric analysis of the effects of
labour law rules on employment, productivity and inequality. It is argued that while there
is a risk of the misuse and misappropriation of legal indicators, they can provide new
evidence on the nature and effects of labour law rules, and thereby contribute to labour
law theory as well as to the resolution of some practical issues of regulatory policy.
Keywords
Empirical legal studies, econometrics, labour law
Introduction
Labour law research has long been more open to interdisciplinary influence than other
subfields of legal scholarship and has made greater use of contextual data drawn from
social science research. This does not, however, mean that labour lawyers see empirical
analysis as central to their field. Empirical research by labour lawyers was and is rare,
and work using quantitative methods is more unusual still. This can be partly ascribed to
the training received by legal researchers (including labour lawyers) which, at all levels
including the critical stage of doctoral formation, continues to be focused on interpretive
Corresponding author:
Simon Deakin, Centre for Business Research, Judge Business School, University of Cambridge, Trumpington
Street, Cambridge CB2 1AG, UK.
Email: s.deakin@cbr.cam.ac.uk
Social & Legal Studies
2018, Vol. 27(4) 456–474
ªThe Author(s) 2018
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DOI: 10.1177/0964663918760385
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skills (Genn et al., 2006). These skills equip labour lawyers well to integrate into their
work the findings and insights of certain fields of philosophical and conceptual inquiry,
but they do not provide them with the means to engage with those modes of research
which are concerned with classifying and mapping the social world.
Through legal origin theory, economists critical of the labour law status quo found a
way to reach policymakers which legal researchers using interpretive techniques had no
ready means of countering. For the proponents of the legal origin hypothesis, ‘the crucial
requirement of reform is the availability of objective data on legal and regulatory rules,
preferably in a comparative form so that the consequences of particular rules can be
evaluated’ (La Porta et al., 2008: 325). Collating such data made it possible for the World
Bank, via its Doing Business reports, to initiate ‘regulatory reforms in dozens of coun-
tries’ (La Porta et al., 2008: 325) in the decade following the appearance of the first
papers to deploy the new methodology. In 2004, a paper written by the research team
responsible for the legal origin hypotheses, using a ‘comprehensive’ approach to the
collection of data on labour laws around the world, found that ‘heavier regulation of
labor has adverse consequences for labor force participation and unemployment, espe-
cially of the young’ (Botero et al., 2004: 1379). In 2008, the World Bank, noting that
‘governments struggle to find the right balance between labor market flexibility and job
stability’, claimed that ‘many countries err on the side of excessive rigidity’ with the
result that ‘in these and other countries laws created to protect workers often hurt them –
especially women, youth and unskilled workers’ (World Bank, 2008: 19). The basis for
this claim was empirical: ‘the collection of data on the flexibility of labor regulations had
spurred significant new research’. Thus ‘in the Indian state of Maharashtra ...a study
finds that rigid labor laws have resulted in 15%fewer jobs being created in the retail
sector’; ‘a study of 90 developing countries finds that exporting businesses grew faster
where labor regulations were flexible’; while ‘in an open economy, flexible labor reg-
ulation can increase annual growth by up to 1.5%’ (World Bank, 2008: 20).
In the event, labour laws have changed less than the advocates of deregulatory reform
might have anticipated, with labour market regulations in 2008 already displaying a
‘mixed’ picture compared to clearer trends liberalizing the rules on business entry and
strengthening investor rights (La Porta et al., 2008: 325). The extreme swings in labour
market regulation and deregulation experienced by some regions (such as virtually the
whole of South America since the 1970s, see ‘Presentation and Transparency of Data’
section) might lead us to think that labour laws are on the whole highly volatile, but this
does not seem to be the case. In a global context, these trends are unusual, with stability
of labour regulation the more normal case, and there is no worldwide trend towards the
removal of worker protections, even in the aftermath of the global financial crisis of
2007–2008 (Adams et al., 2017b; Gahan et al., 2012).
But if labour law systems are proving resistant, on the whole, to deregulatory pres-
sures, the economic critique of their impact on development and growth remains, see-
mingly, ever present. In its 2017 Doing Business report, the World Bank chose to
highlight research over a decade old (Besley and Burgess, 2004) purporting to show
that in India ‘states with rigid employment regulation had lower output, employment and
productivity in formal manufacturing than they would have had if their regulations were
more flexible’ (World Bank, 2016: 92). The World Bank cited five further studies
Deakin 457
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