View full metadata record

dc.titleLabor Market Regulation and Informality
dc.contributor.authorBrotherhood, Luiz
dc.contributor.authorDa Mata, Daniel
dc.contributor.authorSantos, Cezar
dc.contributor.authorGuner, Nezih
dc.contributor.authorKircher, Philipp
dc.contributor.orgunitDepartment of Research and Chief Economist
dc.coverageBrazil
dc.date.available2024-11-21T00:11:00
dc.date.issue2024-11-21T00:11:00
dc.description.abstractThis paper investigates informal employment in Brazil's highly regulated labor market, focusing on the intensive margin of informality within formal firms. Using a comprehensive dataset of labor audits conducted from 1997 to 2012, we find that formal firms caught with informal workers face sustained slower growth. Informal workers are found across firms of all sizes, and their characteristics closely resemble those of formal employees. Building on these empirical findings, we develop a dynamic general equilibrium model where firms balance the flexibility of informality against potential costs. Our framework can be used to explore government policy implications and to examine the impact of audit strategies on informality, output, and workers welfare.
dc.format.extent39
dc.identifier.doihttp://dx.doi.org/10.18235/0013267
dc.identifier.urlhttps://publications.iadb.org/publications/english/document/Labor-Market-Regulation-and-Informality.pdf
dc.language.isoen
dc.publisherInter-American Development Bank
dc.subjectLabor Force
dc.subjectLabor Market
dc.subjectSmall Business
dc.subjectInformal Labor
dc.subjectRegulation
dc.subjectAuditing
dc.subjectLabor
dc.subjectInformal Economy
dc.subjectEconomy
dc.subject.jelcodeJ01 - Labor Economics: General
dc.subject.jelcodeH20 - Taxation, Subsidies, and Revenue: General
dc.subject.jelcodeJ2 - Demand and Supply of Labor
dc.subject.jelcodeL11 - Production, Pricing, and Market Structure • Size Distribution of Firms
idb.identifier.pubnumberIDB-WP-01646
idb.operationRG-E1965
Return to Publication