Inequality and Employment in a Dual Economy
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.
Main Authors: | Carneiro, Pedro, Almeida, Rita |
---|---|
Format: | Working Paper biblioteca |
Language: | English en_US |
Published: |
World Bank, Washington, DC
2007-11-17
|
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 https://hdl.handle.net/10986/28270 |
Tags: |
Add Tag
No Tags, Be the first to tag this record!
|
Similar Items
-
The Impact of Minimum Wage Hikes on Employment and Wages in Cambodia
by: Shrestha, Maheshwor
Published: (2019-05) -
Mandated Benefits, Employment, and Inequality in a Dual Economy
by: Carneiro, Pedro, et al.
Published: (2009-11-01) -
Development and the Labor Share
by: Maarek, Paul, et al.
Published: (2020-02) -
To Ban or Not to Ban? : Regulating Dual Practice in Palestine
by: Alaref, Jumana, et al.
Published: (2017-01-31) -
Informal Employment in Latin America and the Caribbean: Causes, Consequences and Policy Recommendations
by: Inter-American Development Bank