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Trade liberalization, labor reforms and formal–informal employment dynamics

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  • Bosch, Mariano
  • Goñi-Pacchioni, Edwin
  • Maloney, William

Abstract

This paper studies gross worker flows to explain the rise in informality in Brazilian metropolitan labor markets from 1983 to 2002. In particular, we examine the impact of trade and constitutional reforms (that include increased firing costs, tighter restrictions on overtime work, and fewer restrictions on union activity) occurring during the period. We find aggregate sectoral movements to be driven largely by changes in the hiring rates which, in turn are driven largely by the constitutional reforms. Trade liberalization accounts for roughly 1–2.5% of the increase in informality, while the constitutional reforms account for 30–40%.

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Bibliographic Info

Article provided by Elsevier in its journal Labour Economics.

Volume (Year): 19 (2012)
Issue (Month): 5 ()
Pages: 653-667

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Handle: RePEc:eee:labeco:v:19:y:2012:i:5:p:653-667

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Web page: http://www.elsevier.com/locate/labeco

Related research

Keywords: Gross worker flows; Labor market dynamics; Informality; Developing countries;

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References

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Cited by:
  1. Montes-Rojas, G. & Acosta, P., 2013. "Informal Jobs and Trade Liberalisation in Argentina," Working Papers 13/10, Department of Economics, City University London.

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