Labor Enforcement Theory: The Case of Public vs. Private Enforcement

Abstract

Labor laws are enforced in many different ways. Sometimes public agencies enforce the laws and sometimes workers are authorized to do so. Sometimes employer/violators pay for litigation costs and sometimes not. Sometimes the sanctions for violations are set by the harm caused (such as loss of backpay) and sometimes the sanctions are fines and penalties. Sometimes agencies are the primary fora for hearing disputes and sometimes courts. The consequences of these types of differences in labor enforcement are under-studied empirically. Labor enforcement theory, if anything, is even less well-studied. This book chapter examines labor enforcement theory with a focus on the choice between public or private enforcement. The article begins by presenting a standard economic model of enforcement. The chapter then applies the model to private and public enforcement and argues, among other things, that private enforcement adjusts better than public enforcement to economic downturns, but is less effective at enforcing violations that affect current employees. The chapter concludes with a critique and call for re-evaluation of the standard economic model of enforcement.