Law and economics, and the labour market: a comprehensive research agenda

Abstract This article reviews the evolution of law and economics as applied to the study of labour law and labour market issues, as an introduction to the articles included in this special issue. This evolution can be divided into three main stages. Initially, the focus was on the negative effects of labour law on efficiency. This was followed by a stage devoted to examining the role of labour law in addressing market failures. The third stage is marked by the expansion of empirical analysis, driven by the development of causal inference techniques. Throughout this evolution, labour economics has been a key partner in this subfield, with a fruitful exchange of concepts. The result of this interaction between disciplines is a kind of comprehensive research agenda, where law and economics related to the labour market retain the typical characteristics of detailed and nuanced analyses of institutions, legal practice, and the enforcement of legal regulations. The articles in this special issue illustrate this comprehensive perspective. They cover labour tribunals, severance pay, and worker representation at the firm level.