Mandated Benefits, Employment, and Inequality in a Dual Economy
This paper studies the effect of enforcing labor regulation in an economy with a dual labor market. The analysis uses data from Brazil, a country with a large informal sector and strict labor law, where enforcement affects mainly the degree of comp...
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| Format: | Policy Research Working Paper |
| Language: | English |
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2012
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| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091109160938 http://hdl.handle.net/10986/4311 |
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okr-10986-43112021-04-23T14:02:17Z Mandated Benefits, Employment, and Inequality in a Dual Economy Almeida, Rita Carneiro, Pedro ACCESS TO MARKETS ACCESSIBILITY ACCOUNTING AGGREGATE PRODUCTIVITY AGGREGATE PRODUCTIVITY GROWTH AGRICULTURE ASYMMETRIC INFORMATION AVERAGE WAGES BARGAINING BARGAINING POWER CHILD LABOR CITY TRANSPORTATION COMPARATIVE ECONOMICS COMPENSATION PACKAGE COMPETITIVE MODEL COMPETITIVE MODELS CONTRACT LABOR CREATIVE DESTRUCTION DEMAND CURVE DEREGULATION DEVELOPMENT ECONOMICS DISMISSAL DISMISSED WORKER DOMESTIC WORKERS DUAL ECONOMY ECONOMETRIC MODELS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH ELASTICITIES EMPLOYEE EMPLOYMENT EMPLOYMENT HISTORY EMPLOYMENT STATUS EQUATIONS EQUILIBRIUM WAGES EXOGENOUS VARIABLE EXPECTED WAGE EXPENDITURE FIRING COSTS FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH UNEMPLOYMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INCOME TAX INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR INFORMAL SECTOR WORKERS INSPECTION INTERNATIONAL TRADE INVOLUNTARY UNEMPLOYMENT JOB SEARCH JOB SEARCH PROCESS JOB SECURITY JOBS KEYNESIAN UNEMPLOYMENT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR LAW LABOR LAWS LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET POLICIES LABOR MARKET POLICY LABOR MARKET REFORM LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKET VARIABLES LABOR MARKETS LABOR OFFICE LABOR OFFICES LABOR REGULATION LABOR REGULATIONS LABOR SUPPLY LAYOFF LDCS LOCAL LABOR OFFICE MANDATED BENEFITS MARKET THEORY MARKET WAGE MATERNITY BENEFITS MATERNITY LEAVE MINIMUM WAGE MINIMUM WAGES MOBILITY MONOPSONY MONOPSONY POWER MOTIVATION PAID MATERNITY PAYROLL TAXES PER CAPITA INCOME POLICE POLITICAL ECONOMY PRESENT EVIDENCE PREVIOUS SECTION RENT SEEKING RETIREMENT RISK NEUTRAL ROAD ROAD INFRASTRUCTURE ROADS SAFETY SANITATION SELF EMPLOYED SEVERANCE PAY SEVERANCE PAYMENT SEVERANCE PAYMENTS SKILLED WORKERS STRICTER ENFORCEMENT SUBSTITUTES SUPPLY CURVE SUPPLY EQUATIONS TAX TAX REVENUES TAXATION TOP MANAGEMENT TOTAL EMPLOYMENT TOTAL LABOR FORCE TRADE LIBERALIZATION TRANSPARENCY TRANSPORT TRANSPORTATION COST TRANSPORTATION COSTS TRAVEL BY CAR TRAVEL DISTANCE TRAVEL DISTANCES TRAVEL TIME TRAVEL TIMES TRUE TURNOVER UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT INSURANCE UNEMPLOYMENT RATE VALUATION WAGE DIFFERENTIALS WAGE DISTRIBUTION WAGE EARNER WAGE INCREASES WAGE INEQUALITY WAGE PREMIUM WAGE RIGIDITIES WAGE RIGIDITY WORKER WORKER HETEROGENEITY WORKERS YOUNG WORKERS This paper studies the effect of enforcing labor regulation in an economy with a dual labor market. The analysis uses data from Brazil, a country with a large informal sector and strict labor law, where enforcement affects mainly the degree of compliance with mandated benefits (severance pay and health and safety conditions) in the formal sector, and the registration of informal workers. The authors find that stricter enforcement leads to higher unemployment but lower income inequality. They also show that, at the top of the formal wage distribution, workers bear the cost of mandated benefits by receiving lower wages. Wage rigidity (due, say, to the minimum wage) prevents this downward adjustment at the bottom of the income distribution. As a result, formal sector jobs at the bottom of the wage distribution become more attractive, inducing the low-skilled self-employed to search for formal jobs. 2012-03-19T19:13:44Z 2012-03-19T19:13:44Z 2009-11-01 http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091109160938 http://hdl.handle.net/10986/4311 English Policy Research working paper ; no. WPS 5119 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank Publications & Research :: Policy Research Working Paper The World Region The World Region |
| repository_type |
Digital Repository |
| institution_category |
Foreign Institution |
| institution |
Digital Repositories |
| building |
World Bank Open Knowledge Repository |
| collection |
World Bank |
| language |
English |
| topic |
ACCESS TO MARKETS ACCESSIBILITY ACCOUNTING AGGREGATE PRODUCTIVITY AGGREGATE PRODUCTIVITY GROWTH AGRICULTURE ASYMMETRIC INFORMATION AVERAGE WAGES BARGAINING BARGAINING POWER CHILD LABOR CITY TRANSPORTATION COMPARATIVE ECONOMICS COMPENSATION PACKAGE COMPETITIVE MODEL COMPETITIVE MODELS CONTRACT LABOR CREATIVE DESTRUCTION DEMAND CURVE DEREGULATION DEVELOPMENT ECONOMICS DISMISSAL DISMISSED WORKER DOMESTIC WORKERS DUAL ECONOMY ECONOMETRIC MODELS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH ELASTICITIES EMPLOYEE EMPLOYMENT EMPLOYMENT HISTORY EMPLOYMENT STATUS EQUATIONS EQUILIBRIUM WAGES EXOGENOUS VARIABLE EXPECTED WAGE EXPENDITURE FIRING COSTS FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH UNEMPLOYMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INCOME TAX INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR INFORMAL SECTOR WORKERS INSPECTION INTERNATIONAL TRADE INVOLUNTARY UNEMPLOYMENT JOB SEARCH JOB SEARCH PROCESS JOB SECURITY JOBS KEYNESIAN UNEMPLOYMENT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR LAW LABOR LAWS LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET POLICIES LABOR MARKET POLICY LABOR MARKET REFORM LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKET VARIABLES LABOR MARKETS LABOR OFFICE LABOR OFFICES LABOR REGULATION LABOR REGULATIONS LABOR SUPPLY LAYOFF LDCS LOCAL LABOR OFFICE MANDATED BENEFITS MARKET THEORY MARKET WAGE MATERNITY BENEFITS MATERNITY LEAVE MINIMUM WAGE MINIMUM WAGES MOBILITY MONOPSONY MONOPSONY POWER MOTIVATION PAID MATERNITY PAYROLL TAXES PER CAPITA INCOME POLICE POLITICAL ECONOMY PRESENT EVIDENCE PREVIOUS SECTION RENT SEEKING RETIREMENT RISK NEUTRAL ROAD ROAD INFRASTRUCTURE ROADS SAFETY SANITATION SELF EMPLOYED SEVERANCE PAY SEVERANCE PAYMENT SEVERANCE PAYMENTS SKILLED WORKERS STRICTER ENFORCEMENT SUBSTITUTES SUPPLY CURVE SUPPLY EQUATIONS TAX TAX REVENUES TAXATION TOP MANAGEMENT TOTAL EMPLOYMENT TOTAL LABOR FORCE TRADE LIBERALIZATION TRANSPARENCY TRANSPORT TRANSPORTATION COST TRANSPORTATION COSTS TRAVEL BY CAR TRAVEL DISTANCE TRAVEL DISTANCES TRAVEL TIME TRAVEL TIMES TRUE TURNOVER UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT INSURANCE UNEMPLOYMENT RATE VALUATION WAGE DIFFERENTIALS WAGE DISTRIBUTION WAGE EARNER WAGE INCREASES WAGE INEQUALITY WAGE PREMIUM WAGE RIGIDITIES WAGE RIGIDITY WORKER WORKER HETEROGENEITY WORKERS YOUNG WORKERS |
| spellingShingle |
ACCESS TO MARKETS ACCESSIBILITY ACCOUNTING AGGREGATE PRODUCTIVITY AGGREGATE PRODUCTIVITY GROWTH AGRICULTURE ASYMMETRIC INFORMATION AVERAGE WAGES BARGAINING BARGAINING POWER CHILD LABOR CITY TRANSPORTATION COMPARATIVE ECONOMICS COMPENSATION PACKAGE COMPETITIVE MODEL COMPETITIVE MODELS CONTRACT LABOR CREATIVE DESTRUCTION DEMAND CURVE DEREGULATION DEVELOPMENT ECONOMICS DISMISSAL DISMISSED WORKER DOMESTIC WORKERS DUAL ECONOMY ECONOMETRIC MODELS ECONOMIC EFFICIENCY ECONOMIC GROWTH ECONOMIC PERFORMANCE ECONOMIC RESEARCH ELASTICITIES EMPLOYEE EMPLOYMENT EMPLOYMENT HISTORY EMPLOYMENT STATUS EQUATIONS EQUILIBRIUM WAGES EXOGENOUS VARIABLE EXPECTED WAGE EXPENDITURE FIRING COSTS FIRM PERFORMANCE FIRM SIZE GDP GDP PER CAPITA GENERAL EQUILIBRIUM HIGH UNEMPLOYMENT INCOME INCOME DISTRIBUTION INCOME INEQUALITY INCOME TAX INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR INFORMAL SECTOR WORKERS INSPECTION INTERNATIONAL TRADE INVOLUNTARY UNEMPLOYMENT JOB SEARCH JOB SEARCH PROCESS JOB SECURITY JOBS KEYNESIAN UNEMPLOYMENT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR ECONOMICS LABOR FORCE LABOR LAW LABOR LAWS LABOR MARKET LABOR MARKET FLEXIBILITY LABOR MARKET INDICATORS LABOR MARKET INSTITUTIONS LABOR MARKET OUTCOMES LABOR MARKET PERFORMANCE LABOR MARKET POLICIES LABOR MARKET POLICY LABOR MARKET REFORM LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKET VARIABLES LABOR MARKETS LABOR OFFICE LABOR OFFICES LABOR REGULATION LABOR REGULATIONS LABOR SUPPLY LAYOFF LDCS LOCAL LABOR OFFICE MANDATED BENEFITS MARKET THEORY MARKET WAGE MATERNITY BENEFITS MATERNITY LEAVE MINIMUM WAGE MINIMUM WAGES MOBILITY MONOPSONY MONOPSONY POWER MOTIVATION PAID MATERNITY PAYROLL TAXES PER CAPITA INCOME POLICE POLITICAL ECONOMY PRESENT EVIDENCE PREVIOUS SECTION RENT SEEKING RETIREMENT RISK NEUTRAL ROAD ROAD INFRASTRUCTURE ROADS SAFETY SANITATION SELF EMPLOYED SEVERANCE PAY SEVERANCE PAYMENT SEVERANCE PAYMENTS SKILLED WORKERS STRICTER ENFORCEMENT SUBSTITUTES SUPPLY CURVE SUPPLY EQUATIONS TAX TAX REVENUES TAXATION TOP MANAGEMENT TOTAL EMPLOYMENT TOTAL LABOR FORCE TRADE LIBERALIZATION TRANSPARENCY TRANSPORT TRANSPORTATION COST TRANSPORTATION COSTS TRAVEL BY CAR TRAVEL DISTANCE TRAVEL DISTANCES TRAVEL TIME TRAVEL TIMES TRUE TURNOVER UNEMPLOYED UNEMPLOYMENT UNEMPLOYMENT INSURANCE UNEMPLOYMENT RATE VALUATION WAGE DIFFERENTIALS WAGE DISTRIBUTION WAGE EARNER WAGE INCREASES WAGE INEQUALITY WAGE PREMIUM WAGE RIGIDITIES WAGE RIGIDITY WORKER WORKER HETEROGENEITY WORKERS YOUNG WORKERS Almeida, Rita Carneiro, Pedro Mandated Benefits, Employment, and Inequality in a Dual Economy |
| geographic_facet |
The World Region The World Region |
| relation |
Policy Research working paper ; no. WPS 5119 |
| description |
This paper studies the effect of
enforcing labor regulation in an economy with a dual labor
market. The analysis uses data from Brazil, a country with a
large informal sector and strict labor law, where
enforcement affects mainly the degree of compliance with
mandated benefits (severance pay and health and safety
conditions) in the formal sector, and the registration of
informal workers. The authors find that stricter enforcement
leads to higher unemployment but lower income inequality.
They also show that, at the top of the formal wage
distribution, workers bear the cost of mandated benefits by
receiving lower wages. Wage rigidity (due, say, to the
minimum wage) prevents this downward adjustment at the
bottom of the income distribution. As a result, formal
sector jobs at the bottom of the wage distribution become
more attractive, inducing the low-skilled self-employed to
search for formal jobs. |
| format |
Publications & Research :: Policy Research Working Paper |
| author |
Almeida, Rita Carneiro, Pedro |
| author_facet |
Almeida, Rita Carneiro, Pedro |
| author_sort |
Almeida, Rita |
| title |
Mandated Benefits, Employment, and Inequality in a Dual Economy |
| title_short |
Mandated Benefits, Employment, and Inequality in a Dual Economy |
| title_full |
Mandated Benefits, Employment, and Inequality in a Dual Economy |
| title_fullStr |
Mandated Benefits, Employment, and Inequality in a Dual Economy |
| title_full_unstemmed |
Mandated Benefits, Employment, and Inequality in a Dual Economy |
| title_sort |
mandated benefits, employment, and inequality in a dual economy |
| publishDate |
2012 |
| url |
http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20091109160938 http://hdl.handle.net/10986/4311 |
| _version_ |
1764390873947176960 |