Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil

Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil

This paper studies the impact of an increase in the enforcement of labor regulations on unemployment and inequality, using city level data from Brazil. We find that stricter enforcement (affecting the payment of mandated benefits to formal workers)...

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Main Authors: Almeida, Rita, Carneiro, Pedro
Format: Working Paper
Language:English
en_US
Published: World Bank, Washington, DC 2017
Subjects:
INEQUALITY
EMPLOYMENT
LABOR REGULATIONS
INFORMAL LABOR
DUAL ECONOMY
LABOR MARKET
Online Access:http://documents.worldbank.org/curated/en/408911495747492410/Inequality-and-Employment-in-a-Dual-Economy-Enforcement-of-Labor-Regulation-in-Brazil
http://hdl.handle.net/10986/28270
id okr-10986-28270
recordtype oai_dc
spelling okr-10986-282702021-04-23T14:04:43Z Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil Almeida, Rita Carneiro, Pedro INEQUALITY EMPLOYMENT LABOR REGULATIONS INFORMAL LABOR DUAL ECONOMY LABOR MARKET This paper studies the impact of an increase in the enforcement of labor regulations on unemployment and inequality, using city level data from Brazil. We find that stricter enforcement (affecting the payment of mandated benefits to formal workers) leads to: higher unemployment, less income inequality, a higher proportion of formal employment, and a lower formal wage premium. Our results are consistent with a model where stricter enforcement causes a contraction in labor demand in both the formal and informal sectors; and where workers value mandated benefits highly, so that there is an increase in the formal sector labor supply, an increase in the willingness to become unemployed to search for a formal sector job, and a decrease in labor supply to the informal sector. 2017-09-11T14:35:53Z 2017-09-11T14:35:53Z 2007-11-17 Working Paper http://documents.worldbank.org/curated/en/408911495747492410/Inequality-and-Employment-in-a-Dual-Economy-Enforcement-of-Labor-Regulation-in-Brazil http://hdl.handle.net/10986/28270 English en_US CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Working Paper Latin America & Caribbean Brazil
repository_type Digital Repository
institution_category Foreign Institution
institution Digital Repositories
building World Bank Open Knowledge Repository
collection World Bank
language English
en_US
topic INEQUALITY
EMPLOYMENT
LABOR REGULATIONS
INFORMAL LABOR
DUAL ECONOMY
LABOR MARKET
spellingShingle INEQUALITY
EMPLOYMENT
LABOR REGULATIONS
INFORMAL LABOR
DUAL ECONOMY
LABOR MARKET
Almeida, Rita
Carneiro, Pedro
Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
geographic_facet Latin America & Caribbean
Brazil
description This paper studies the impact of an increase in the enforcement of labor regulations on unemployment and inequality, using city level data from Brazil. We find that stricter enforcement (affecting the payment of mandated benefits to formal workers) leads to: higher unemployment, less income inequality, a higher proportion of formal employment, and a lower formal wage premium. Our results are consistent with a model where stricter enforcement causes a contraction in labor demand in both the formal and informal sectors; and where workers value mandated benefits highly, so that there is an increase in the formal sector labor supply, an increase in the willingness to become unemployed to search for a formal sector job, and a decrease in labor supply to the informal sector.
format Working Paper
author Almeida, Rita
Carneiro, Pedro
author_facet Almeida, Rita
Carneiro, Pedro
author_sort Almeida, Rita
title Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
title_short Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
title_full Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
title_fullStr Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
title_full_unstemmed Inequality and Employment in a Dual Economy : Enforcement of Labor Regulation in Brazil
title_sort inequality and employment in a dual economy : enforcement of labor regulation in brazil
publisher World Bank, Washington, DC
publishDate 2017
url http://documents.worldbank.org/curated/en/408911495747492410/Inequality-and-Employment-in-a-Dual-Economy-Enforcement-of-Labor-Regulation-in-Brazil
http://hdl.handle.net/10986/28270
_version_ 1764464762970701824

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