ABSTRACT
Old institutionalists have long recognized that labor is a fixed cost from a social efficiency perspective (Clark 1957; Commons and Andrews 1967). Protective labor legislation has been institutionalized in most capitalist countries in order to induce business enterprises to pay a larger portion of the actual cost of the human factor of production than they would be prepared to pay in its absence. Hence, institutional economists argue the necessity of protective labor legislation, as well as the use of administrative controls and legal sanctions, in order to provide substantial measures to reduce the adverse consequences upon workers induced by a variety of interdependent conditions: unemployment, precarious employment and unsafe or unhealthy working conditions.
