One world of labour regulation, two worlds of trade: examples of Belgium and Brazil

Supposedly, labour regulation makes firms less competitive in international markets. This paper studies the adoption of labour laws in Belgium before 1914 and Brazil in the 1920s. In the two countries, regulation induced investments in new plant and equipment. The rise in labour productivity made Belgian firms better exporters in the context of expanding world trade. Brazil did not reap similar gains because international trade was collapsing.