Enforcement of Labor Regulation and Informality

• Tác giả: Pedro Carniero
• Ngôn ngữ: eng
• Ký hiệu phân loại: 331.88 Labor unions (Trade unions)
• Thông tin xuất bản: American Economic Association, 2014
• Bộ sưu tập: Tài liệu truy cập mở
• ID: 327777
• Chủ đề: 1. labor turnover; 2. layoffs; 3. vacancies; 4. wage differentials; 5. wage level and structure

Tóm tắt

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.