Enforcement of Labor Regulation, Informal Labor, and Firm Performance

This paper investigates how enforcement of labor regulation affects the firm's use of informal employment and its impact on firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, the authors sh...

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Main Authors:	Almeida, Rita, Carneiro, Pedro
Format:	Policy Research Working Paper
Language:	English
Published:	World Bank, Washington, DC 2012
Subjects:	AVERAGE WAGE AVERAGE WAGES CITIES DISMISSAL DISMISSALS DISMISSED WORKERS EMPLOYEE EMPLOYERS EMPLOYMENT EFFECTS EMPLOYMENT LAW EXOGENOUS VARIABLES FIRING FIRING COSTS FIRM LEVEL FIRM PERFORMANCE FOREIGN OWNERSHIP HIGH WAGE HIRING HOURS OF WORK ILLEGAL EMPLOYMENT INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR JOB SECURITY JOB SECURITY REGULATION JOB TENURE JOBS LABOR CONTRACT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR FORCE LABOR LAW LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATION LABOR REGULATIONS LARGE CITIES LAWS MINIMUM WAGES PAID WORKERS PERMANENT EMPLOYMENT PERMANENT WORKERS PRESENT EVIDENCE PREVIOUS SECTION PRIVATE SECTOR PRIVATE SURVEY FIRM PRODUCTIVITY GROWTH PRODUCTIVITY REGRESSIONS RETIREMENT SEVERANCE PAYMENT SEVERANCE PAYMENTS SOCIAL PROTECTION SOCIAL SECURITY SUPPLIERS TEMPORARY EMPLOYMENT TEMPORARY WORKERS TOTAL EMPLOYMENT TRANSPORT UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNIONS WAGE RATE WORK IN PROGRESS WORK LOAD WORK PERMIT WORKER WORKERS WORKING WORKING HOURS
Online Access:	http://documents.worldbank.org/curated/en/2005/10/6350158/enforcement-labor-regulation-informal-labor-firm-performance http://hdl.handle.net/10986/8409

id	okr-10986-8409
recordtype	oai_dc
spelling	okr-10986-84092021-04-23T14:02:43Z Enforcement of Labor Regulation, Informal Labor, and Firm Performance Almeida, Rita Carneiro, Pedro AVERAGE WAGE AVERAGE WAGES CITIES DISMISSAL DISMISSALS DISMISSED WORKERS EMPLOYEE EMPLOYERS EMPLOYMENT EFFECTS EMPLOYMENT LAW EXOGENOUS VARIABLES FIRING FIRING COSTS FIRM LEVEL FIRM PERFORMANCE FOREIGN OWNERSHIP HIGH WAGE HIRING HOURS OF WORK ILLEGAL EMPLOYMENT INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR JOB SECURITY JOB SECURITY REGULATION JOB TENURE JOBS LABOR CONTRACT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR FORCE LABOR LAW LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATION LABOR REGULATIONS LARGE CITIES LAWS MINIMUM WAGES PAID WORKERS PERMANENT EMPLOYMENT PERMANENT WORKERS PRESENT EVIDENCE PREVIOUS SECTION PRIVATE SECTOR PRIVATE SURVEY FIRM PRODUCTIVITY GROWTH PRODUCTIVITY REGRESSIONS RETIREMENT SEVERANCE PAYMENT SEVERANCE PAYMENTS SOCIAL PROTECTION SOCIAL SECURITY SUPPLIERS TEMPORARY EMPLOYMENT TEMPORARY WORKERS TOTAL EMPLOYMENT TRANSPORT UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNIONS WAGE RATE WORK IN PROGRESS WORK LOAD WORK PERMIT WORKER WORKERS WORKING WORKING HOURS This paper investigates how enforcement of labor regulation affects the firm's use of informal employment and its impact on firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, the authors show that in areas where law enforcement is stricter firms employ a smaller amount of informal employment. Furthermore, by reducing the firm's access to unregulated labor, stricter enforcement also decreases average wages, productivity, and investment. The results are robust to several specification changes, and to instrumenting enforcement with (1) measures of access of labor inspectors to firms, and (2) measures of general law enforcement in the area where the firm is located. 2012-06-19T14:52:05Z 2012-06-19T14:52:05Z 2005-10 http://documents.worldbank.org/curated/en/2005/10/6350158/enforcement-labor-regulation-informal-labor-firm-performance http://hdl.handle.net/10986/8409 English Policy Research Working Paper; No. 3756 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research :: Policy Research Working Paper Publications & Research
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English
topic	AVERAGE WAGE AVERAGE WAGES CITIES DISMISSAL DISMISSALS DISMISSED WORKERS EMPLOYEE EMPLOYERS EMPLOYMENT EFFECTS EMPLOYMENT LAW EXOGENOUS VARIABLES FIRING FIRING COSTS FIRM LEVEL FIRM PERFORMANCE FOREIGN OWNERSHIP HIGH WAGE HIRING HOURS OF WORK ILLEGAL EMPLOYMENT INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR JOB SECURITY JOB SECURITY REGULATION JOB TENURE JOBS LABOR CONTRACT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR FORCE LABOR LAW LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATION LABOR REGULATIONS LARGE CITIES LAWS MINIMUM WAGES PAID WORKERS PERMANENT EMPLOYMENT PERMANENT WORKERS PRESENT EVIDENCE PREVIOUS SECTION PRIVATE SECTOR PRIVATE SURVEY FIRM PRODUCTIVITY GROWTH PRODUCTIVITY REGRESSIONS RETIREMENT SEVERANCE PAYMENT SEVERANCE PAYMENTS SOCIAL PROTECTION SOCIAL SECURITY SUPPLIERS TEMPORARY EMPLOYMENT TEMPORARY WORKERS TOTAL EMPLOYMENT TRANSPORT UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNIONS WAGE RATE WORK IN PROGRESS WORK LOAD WORK PERMIT WORKER WORKERS WORKING WORKING HOURS
spellingShingle	AVERAGE WAGE AVERAGE WAGES CITIES DISMISSAL DISMISSALS DISMISSED WORKERS EMPLOYEE EMPLOYERS EMPLOYMENT EFFECTS EMPLOYMENT LAW EXOGENOUS VARIABLES FIRING FIRING COSTS FIRM LEVEL FIRM PERFORMANCE FOREIGN OWNERSHIP HIGH WAGE HIRING HOURS OF WORK ILLEGAL EMPLOYMENT INFORMAL EMPLOYMENT INFORMAL LABOR MARKETS INFORMAL SECTOR JOB SECURITY JOB SECURITY REGULATION JOB TENURE JOBS LABOR CONTRACT LABOR CONTRACTS LABOR COSTS LABOR DEMAND LABOR FORCE LABOR LAW LABOR MARKET LABOR MARKET INSTITUTIONS LABOR MARKET REGULATION LABOR MARKET REGULATIONS LABOR MARKETS LABOR PRODUCTIVITY LABOR REGULATION LABOR REGULATIONS LARGE CITIES LAWS MINIMUM WAGES PAID WORKERS PERMANENT EMPLOYMENT PERMANENT WORKERS PRESENT EVIDENCE PREVIOUS SECTION PRIVATE SECTOR PRIVATE SURVEY FIRM PRODUCTIVITY GROWTH PRODUCTIVITY REGRESSIONS RETIREMENT SEVERANCE PAYMENT SEVERANCE PAYMENTS SOCIAL PROTECTION SOCIAL SECURITY SUPPLIERS TEMPORARY EMPLOYMENT TEMPORARY WORKERS TOTAL EMPLOYMENT TRANSPORT UNEMPLOYMENT UNEMPLOYMENT BENEFITS UNEMPLOYMENT INSURANCE UNIONS WAGE RATE WORK IN PROGRESS WORK LOAD WORK PERMIT WORKER WORKERS WORKING WORKING HOURS Almeida, Rita Carneiro, Pedro Enforcement of Labor Regulation, Informal Labor, and Firm Performance
relation	Policy Research Working Paper; No. 3756
description	This paper investigates how enforcement of labor regulation affects the firm's use of informal employment and its impact on firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, the authors show that in areas where law enforcement is stricter firms employ a smaller amount of informal employment. Furthermore, by reducing the firm's access to unregulated labor, stricter enforcement also decreases average wages, productivity, and investment. The results are robust to several specification changes, and to instrumenting enforcement with (1) measures of access of labor inspectors to firms, and (2) measures of general law enforcement in the area where the firm is located.
format	Publications & Research :: Policy Research Working Paper
author	Almeida, Rita Carneiro, Pedro
author_facet	Almeida, Rita Carneiro, Pedro
author_sort	Almeida, Rita
title	Enforcement of Labor Regulation, Informal Labor, and Firm Performance
title_short	Enforcement of Labor Regulation, Informal Labor, and Firm Performance
title_full	Enforcement of Labor Regulation, Informal Labor, and Firm Performance
title_fullStr	Enforcement of Labor Regulation, Informal Labor, and Firm Performance
title_full_unstemmed	Enforcement of Labor Regulation, Informal Labor, and Firm Performance
title_sort	enforcement of labor regulation, informal labor, and firm performance
publisher	World Bank, Washington, DC
publishDate	2012
url	http://documents.worldbank.org/curated/en/2005/10/6350158/enforcement-labor-regulation-informal-labor-firm-performance http://hdl.handle.net/10986/8409
_version_	1764407898727776256

Enforcement of Labor Regulation, Informal Labor, and Firm Performance

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