Institutions, Informality, and Wage Flexibility; Evidence From Brazil
Even though institutions are created to protect workers, they may interfere with labor market functioning, raise unemployment, and end up being circumvented by informal contracts. This paper uses Brazilian microeconomic data to show that the institutional changes introduced by the 1988 Constitution lowered the sensitivity of real wages to changes in labor market slack and could have contributed to the ensuing higher rates of unemployment in the country. Moreover, the paper shows that states that faced higher increases in informality (i.e., illegal work contracts) following the introduction of the new Constitution tended to have smaller drops in wage responsiveness to macroeconomic conditions, thus suggesting that informality serves as a escape valve to an over-regulated environment.
|Date of creation:||01 Mar 2012|
|Contact details of provider:|| Postal: International Monetary Fund, Washington, DC USA|
Phone: (202) 623-7000
Fax: (202) 623-4661
Web page: http://www.imf.org/external/pubind.htm
More information through EDIRC
|Order Information:||Web: http://www.imf.org/external/pubs/pubs/ord_info.htm|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ricardo Paes de Barros & Carlos Henrique Corseuil, 2001.
"The Impact of Regulations on Brazilian Labor Market Performance,"
Research Department Publications
3124, Inter-American Development Bank, Research Department.
- Ricardo Paes de Barros & Carlos Henrique Corseuil, 2004. "The Impact of Regulations on Brazilian Labor Market Performance," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 273-350 National Bureau of Economic Research, Inc.
- Koujianou Goldberg, Pinelopi & Pavcnik, Nina, 2003.
"The response of the informal sector to trade liberalization,"
Journal of Development Economics,
Elsevier, vol. 72(2), pages 463-496, December.
- Goldberg, Pinelopi Koujianou & Pavcnik, Nina, 2003. "The Response of the Informal Sector to Trade Liberalization," CEPR Discussion Papers 3874, C.E.P.R. Discussion Papers.
- Pinelopi K. Goldberg & Nina Pavcnik, 2003. "The Response of the Informal Sector to Trade Liberalization," NBER Working Papers 9443, National Bureau of Economic Research, Inc.
- de Carvalho Filho, Irineu & Chamon, Marcos, 2011.
"The myth of post-reform income stagnation: Evidence from Brazil and Mexico,"
28532, University Library of Munich, Germany.
- Filho, Irineu de Carvalho & Chamon, Marcos, 2012. "The myth of post-reform income stagnation: Evidence from Brazil and Mexico," Journal of Development Economics, Elsevier, vol. 97(2), pages 368-386.
- Irineu E de Carvalho Filho & Marcos d Chamon, 2008. "The Myth of Post-Reform Income Stagnation; Evidence from Brazil and Mexico," IMF Working Papers 08/197, .
- repec:fth:prinin:343 is not listed on IDEAS
- Baltagi, Badi H. & Blien, Uwe & Wolf, Katja, 2008.
"New Evidence on the Dynamic Wage Curve for Western Germany: 1980–2004,"
IZA Discussion Papers
3433, Institute for the Study of Labor (IZA).
- Baltagi, Badi H. & Blien, Uwe & Wolf, Katja, 2009. "New evidence on the dynamic wage curve for Western Germany: 1980-2004," Labour Economics, Elsevier, vol. 16(1), pages 47-51, January.
- Badi H. Baltagi & Uwe Blien & Katja Wolf, 2008. "New Evidence on the Dynamic Wage Curve for Western Germany: 1980-2004," Center for Policy Research Working Papers 103, Center for Policy Research, Maxwell School, Syracuse University.
- Pedro Cavalcanti Ferreira & Roberto Ellery Jr & Victor Gomes, 2005.
"Produtividade Agregada Brasileira (1970-2000): Declínio Robusto E Fraca Recuperação,"
Anais do XXXIII Encontro Nacional de Economia [Proceedings of the 33th Brazilian Economics Meeting]
062, ANPEC - Associação Nacional dos Centros de Pósgraduação em Economia [Brazilian Association of Graduate Programs in Economics].
- Ferreira, Pedro Cavalcanti & Ellery Júnior, Roberto de Góes & Gomes, Victor, 2005. "Produtividade agregada brasileira (1970-2000): declínio robusto e fraca recuperação," Economics Working Papers (Ensaios Economicos da EPGE) 594, FGV/EPGE Escola Brasileira de Economia e Finanças, Getulio Vargas Foundation (Brazil).
- repec:pri:indrel:dsp01pn89d659s is not listed on IDEAS
- Alm, James & Bahl, Roy & Murray, Matthew N, 1991. "Tax Base Erosion in Developing Countries," Economic Development and Cultural Change, University of Chicago Press, vol. 39(4), pages 849-872, July.
- Sanz de Galdeano, Anna & Turunen, Jarkko, 2005. "Real wages and local unemployment in the euro area," Working Paper Series 0471, European Central Bank.
- Aureo de Paula & Jose A Sheinkman, 2007.
"The Informal Sector,"
122247000000001663, UCLA Department of Economics.
- Aureo de Paula & Jose A. Scheinkman, 2006. "The Informal Sector," Levine's Bibliography 122247000000001030, UCLA Department of Economics.
- Jose Scheinkman & Aureo de Paula, 2007. "The Informal Sector," 2007 Meeting Papers 117, Society for Economic Dynamics.
- Aureo de Paula & Jose A. Scheinkman, 2007. "The Informal Sector," PIER Working Paper Archive 07-033, Penn Institute for Economic Research, Department of Economics, University of Pennsylvania.
- Áureo de Paula & José A. Scheinkman, 2007. "The Informal Sector," NBER Working Papers 13486, National Bureau of Economic Research, Inc.
- David Card, 1995.
"The Wage Curve: A Review,"
Journal of Economic Literature,
American Economic Association, vol. 33(2), pages 285-299, June.
- Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
- Ulyssea, Gabriel, 2010. "Regulation of entry, labor market institutions and the informal sector," Journal of Development Economics, Elsevier, vol. 91(1), pages 87-99, January.
- Pedro Cavalcanti Ferreira & JosÈ Luiz Rossi, 2003. "New Evidence from Brazil on Trade Liberalization and Productivity Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 44(4), pages 1383-1405, November.
When requesting a correction, please mention this item's handle: RePEc:imf:imfwpa:12/84. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Jim Beardow)or (Hassan Zaidi)
If references are entirely missing, you can add them using this form.