Enforcement of Labor Regulation and Informality

• 成果类型: Article
• 署名作者: Almeida, Rita; Carneiro, Pedro
• 署名单位: The World Bank; University of London; University College London; London School Economics & Political Science; Georgetown University
• 刊物名称: AMERICAN ECONOMIC JOURNAL-APPLIED ECONOMICS
• ISSN/ISSBN: 1945-7782
• DOI: 10.1257/app.4.3.64
• 发表日期: 2012
• 页码: 64-89
• 关键词: determinants; unemployment; INEQUALITY; earnings; MARKETS; GROWTH; TRADE; MODEL

摘要

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.