New Economics Papers
on Law and Economics
Issue of 2007‒07‒20
three papers chosen by
Jeong-Joon Lee, Towson University

  1. Employment Law and the Labor Market By Christine Jolls
  2. Does the Minimum Legal Drinking Age Save Lives? By Jeffrey A. Miron; Elina Tetelbaum
  3. A Mean-Variance Portfolio Analysis of the Demand and Supply of a Potentially Infectious Service By Levy, Amnon

  1. By: Christine Jolls
    Abstract: Legal rules governing the employer-employee relationship are many and varied. Economic analysis has illuminated both the efficiency and the effects on employee welfare of such rules, as described in this paper. Topics addressed include workplace safety mandates, compensation systems for workplace injuries, privacy protection in the workplace, employee fringe benefits mandates, targeted mandates such as medical and family leave, wrongful discharge laws, unemployment insurance systems, minimum wage rules, and rules requiring that employees receive overtime pay. Both economic theory and empirical evidence are considered.
    JEL: J08 J18 J38 K00 K31 K32
    Date: 2007–07
  2. By: Jeffrey A. Miron; Elina Tetelbaum
    Abstract: The minimum legal drinking age (MLDA) is widely believed to save lives by reducing traffic fatalities among underage drivers. Further, the Federal Uniform Drinking Age Act, which pressured all states to adopt an MLDA of 21, is regarded as having contributed enormously to this life saving effect. This paper challenges both claims. State-level panel data for the past 30 years show that any nationwide impact of the MLDA is driven by states that increased their MLDA prior to any inducement from the federal government. Even in early adopting states, the impact of the MLDA did not persist much past the year of adoption. The MLDA appears to have only a minor impact on teen drinking.
    JEL: H11 K42
    Date: 2007–07
  3. By: Levy, Amnon (University of Wollongong)
    Abstract: A health-risking illegal personal service is transacted when the expected extra satisfaction rate exceeds the ratio of the expected extra cost to the legal service price. Its prevalence decreases with the costs of risk bearing for the providers and clients. Law-enforcement effort lowers (raises) the equilibrium price of the illegal and hazardous service when the ratio of the providers’ and the clients’ degrees of absolute risk aversion is greater (smaller) than the ratio of the law-enforcement elasticities of their cost bearing.
    Keywords: Unsafe service; Health risk; Legal risk; Law enforcement
    JEL: D4 D8 I1 K4
    Date: 2007

This issue is ©2007 by Jeong-Joon Lee. It is provided as is without any express or implied warranty. It may be freely redistributed in whole or in part for any purpose. If distributed in part, please include this notice.
General information on the NEP project can be found at For comments please write to the director of NEP, Marco Novarese at <>. Put “NEP” in the subject, otherwise your mail may be rejected.
NEP’s infrastructure is sponsored by the School of Economics and Finance of Massey University in New Zealand.