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Effects of Labor Market Regulation for Underprivileged Workers: Evidence from Brazil

Author

Listed:
  • Joana Costa

    (IPEA)

  • Felipe Russo

    (IPEA)

  • Guilherme Hirata

    (IDados)

  • Ana Luiza Neves Holanda Barbosa

    (IPEA)

Abstract

This paper analyses the impact of a Brazilian reform that guaranteed for domestic workers the same labour rights that other employees already had access to. In 2013, the first change was to establish a limit to weekly working hours and the obligation to pay overtime. Two years later, other rights became enforceable after the implementation of a system that unified payroll taxes and social contributions to be collected by domestic workers’ employers. We analyse the institutional reform through a difference-in-differences approach controlling for individual fixed effects. The analysis is carried out with microdata from the Continuous National Household Sample Survey from 2012 through 2016. Our results suggest that the policy induced a small reduction in working hours and had no effect on wages or formality. Impacts on the transition from domestic labour to unemployment after the reform are found, but they are not robust.

Suggested Citation

  • Joana Costa & Felipe Russo & Guilherme Hirata & Ana Luiza Neves Holanda Barbosa, 2023. "Effects of Labor Market Regulation for Underprivileged Workers: Evidence from Brazil," Journal of Labor Research, Springer, vol. 44(3), pages 261-293, December.
    • Handle: RePEc:spr:jlabre:v:44:y:2023:i:3:d:10.1007_s12122-023-09348-3
    DOI: 10.1007/s12122-023-09348-3
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    References listed on IDEAS

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    1. Dinkelman, Taryn & Ranchhod, Vimal, 2012. "Evidence on the impact of minimum wage laws in an informal sector: Domestic workers in South Africa," Journal of Development Economics, Elsevier, vol. 99(1), pages 27-45.
    2. Ulyssea, Gabriel & Ponczek, Vladimir, 2018. "Enforcement of Labor Regulation and the Labor Market Effects of Trade: Evidence from Brazil," IZA Discussion Papers 11783, Institute of Labor Economics (IZA).
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    5. Bell, Linda A, 1997. "The Impact of Minimum Wages in Mexico and Colombia," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 102-135, July.
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    7. Joana Simões de Melo Costa & Ana Luiza Neves de Holanda Barbosa & Guilherme Hirata, 2016. "Effects of domestic worker legislation reform in Brazil," One Pager 336, International Policy Centre for Inclusive Growth.
    8. Theodoro, Maria Isabel Accoroni & Scorzafave, Luiz Guilherme, 2011. "Impacto da redução dos encargos trabalhistas sobre a formalização das empregadas domésticas," Revista Brasileira de Economia - RBE, EPGE Brazilian School of Economics and Finance - FGV EPGE (Brazil), vol. 65(1), March.
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