Economic growth and labour standards revisited: Evidence from a dynamic panel data model

Bonnal (2010) studies the effect of labour standards on economic growth using a dynamic panel data model for 121 countries over 1974-2004. He focuses on two measures of labour standards and finds that higher labour standards promote economic growth. This study tests the robustness of these results by (a) using a longer period of study (1965-2000), (b) using five-year averaged data to control for cyclicality in GDP growth, and (c) using a larger number of labour standard indicators. The results reveal heterogeneous effects- decreasing injuries at work increases growth, while rising maternity leave decreases growth.