Enforcement of Labor Regulation and Informality

Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections, workers pay for mand...

Full description

Bibliographic Details
Main Authors:	Almeida, Rita, Carniero, Pedro
Format:	Journal Article
Language:	en_US
Published:	American Economic Association 2014
Subjects:	wage level and structure wage differentials labor turnover vacancies layoffs labor standards public policy labor law economic development human resources human development income distribution migration
Online Access:	http://hdl.handle.net/10986/17924

id	okr-10986-17924
recordtype	oai_dc
spelling	okr-10986-179242021-04-23T14:03:41Z Enforcement of Labor Regulation and Informality Almeida, Rita Carniero, Pedro wage level and structure wage differentials labor turnover vacancies layoffs labor standards public policy labor law economic development human resources human development income distribution migration Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections, workers pay for mandated benefits by receiving lower wages. Wage rigidity prevents downward adjustment at the bottom of the wage distribution. As a result, lower paid formal sector jobs become attractive to some informal workers, inducing them to want to move to the formal sector. 2014-04-21T17:25:24Z 2014-04-21T17:25:24Z 2012-07 Journal Article American Economic Journal: Applied Economics 1945-7782 10.1257/app.4.3.64 http://hdl.handle.net/10986/17924 en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo American Economic Association American Economic Association Publications & Research :: Journal Article
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	en_US
topic	wage level and structure wage differentials labor turnover vacancies layoffs labor standards public policy labor law economic development human resources human development income distribution migration
spellingShingle	wage level and structure wage differentials labor turnover vacancies layoffs labor standards public policy labor law economic development human resources human development income distribution migration Almeida, Rita Carniero, Pedro Enforcement of Labor Regulation and Informality
description	Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections, workers pay for mandated benefits by receiving lower wages. Wage rigidity prevents downward adjustment at the bottom of the wage distribution. As a result, lower paid formal sector jobs become attractive to some informal workers, inducing them to want to move to the formal sector.
format	Journal Article
author	Almeida, Rita Carniero, Pedro
author_facet	Almeida, Rita Carniero, Pedro
author_sort	Almeida, Rita
title	Enforcement of Labor Regulation and Informality
title_short	Enforcement of Labor Regulation and Informality
title_full	Enforcement of Labor Regulation and Informality
title_fullStr	Enforcement of Labor Regulation and Informality
title_full_unstemmed	Enforcement of Labor Regulation and Informality
title_sort	enforcement of labor regulation and informality
publisher	American Economic Association
publishDate	2014
url	http://hdl.handle.net/10986/17924
_version_	1764438706055282688

Enforcement of Labor Regulation and Informality

Similar Items