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Economic expansion and increase in labout market formality: A poaching approach

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  • Corseuil, Carlos Henrique L.
  • Foguel, Miguel Nathan

Abstract

This paper investigates the relationship between economic expansion and the degree of formalization for the Brazilian labour market in the recent period. We present a theoretical framework that attempts to explain this relationship through the dynamics of firms hiring strategies. The main predictions are: the share of formal employment rises as the unemployment rate falls, and that the formal-informal wage gap increases, at least at the beginning of the economic expansion. In the empirical part, we use longitudinal microdata from a Brazilian household survey to check whether these two predictions are confirmed. To a large extent our results corroborate both predictions

Suggested Citation

  • Corseuil, Carlos Henrique L. & Foguel, Miguel Nathan, 2012. "Economic expansion and increase in labout market formality: A poaching approach," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 66(2), June.
    • Handle: RePEc:fgv:epgrbe:v:66:y:2012:i:2:a:3870
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    Cited by:

    1. Roxana Maurizio & Ana Paula Monsalvo, 2021. "Informality, labour transitions, and the livelihoods of workers in Latin America," WIDER Working Paper Series wp-2021-19, World Institute for Development Economic Research (UNU-WIDER).
    2. Ana Maria Bonomi Barufi & Eduardo A. Haddad, Peter Nijkamp, 2016. "New evidence on the wage curve: non-linearities, urban size, and spatial scale in Brazil," Working Papers, Department of Economics 2016_39, University of São Paulo (FEA-USP).
    3. Ana Barufi & Eduardo Haddad & Peter Nijkamp, 2016. "A comprehensive analysis of the wage curve in Brazil: Non-linearities, urban size, and the spatial dimension," ERSA conference papers ersa16p279, European Regional Science Association.
    4. Jamie Bologna, 2017. "Contagious corruption, informal employment, and income: evidence from Brazilian municipalities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 58(1), pages 67-118, January.
    5. Fairris, David & Jonasson, Erik, 2016. "Determinants of Changing Informal Employment in Brazil, 2000–2010," MPRA Paper 71475, University Library of Munich, Germany.

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