IDEAS home Printed from https://ideas.repec.org/p/spa/wpaper/2013wpecon22.html
   My bibliography  Save this paper

Producing Higher Quality Jobs: Enforcement of Mandated Benefits across Brazilian Cities between 1996-2007

Author

Listed:
  • Rita Almeida
  • Pedro Carneiro, Renata Narita

Abstract

There is an open debate on how governments can help the creation of higher quality jobs. This paper explores unique administrative data on the enforcement of labor market regulations across Brazilian cities between 1996 and 2006 to analyze this topic. We proxy job quality with several attributes going beyond wages and formality of the work contract. In the context of a strictly regulated labor market, we find robust evidence of (i) a strong trade-off between the provision of mandated non-wage benefits and wage levels, on the one hand, and the provision of optional job benefits on the other, and (ii) more formality leads to higher mean wages in the economy. We argue that enforcement policies can increase welfare depending on how workers value the benefits they get through formal channels vis-à-vis wages and optional benefits.

Suggested Citation

  • Rita Almeida & Pedro Carneiro, Renata Narita, 2013. "Producing Higher Quality Jobs: Enforcement of Mandated Benefits across Brazilian Cities between 1996-2007," Working Papers, Department of Economics 2013_22, University of São Paulo (FEA-USP).
    • Handle: RePEc:spa:wpaper:2013wpecon22
    as

    Download full text from publisher

    File URL: http://www.repec.eae.fea.usp.br/documentos/Almeida_Carneiro_Narita_Job_Quality22WP.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Boeri, Tito & Helppie, Brooke & Macis, Mario, 2008. "Labor regulations in developing countries : a review of the evidence and directions for future research," Social Protection Discussion Papers and Notes 46306, The World Bank.
    2. Florencia Lopez Boo & Lucia Madrigal & Carmen Pages, 2010. "Part-Time Work, Gender and Job Satisfaction: Evidence from a Developing Country," Journal of Development Studies, Taylor & Francis Journals, vol. 46(9), pages 1543-1571.
    3. de Mel, Suresh & McKenzie, David & Woodruff, Christopher, 2009. "Innovative Firms or Innovative Owners? Determinants of Innovation in Micro, Small, and Medium Enterprises," IZA Discussion Papers 3962, Institute of Labor Economics (IZA).
    4. Ricardo Paes de Barros & Carlos Henrique Corseuil & Gustavo Gonzaga, 1999. "Labor market regulations and the demand for labor in Brazil," Textos para discussão 398, Department of Economics PUC-Rio (Brazil).
    5. Adriana Kugler & Maurice Kugler, 2009. "Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 335-358, January.
    6. Benjamin Artz, 2010. "Fringe benefits and job satisfaction," International Journal of Manpower, Emerald Group Publishing Limited, vol. 31(6), pages 626-644, September.
    7. Adriana Kugler, 1999. "The Impact of Firing Costs on Turnover and Unemployment: Evidence from the Colombian Labour Market Reform," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 6(3), pages 389-410, August.
    8. Bosch, Mariano & Maloney, William F., 2008. "Cyclical Movements in Unemployment and Informality in Developing Countries," IZA Discussion Papers 3514, Institute of Labor Economics (IZA).
    9. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
    10. Rita Almeida & Ana Margarida Fernandes, 2008. "Openness and Technological Innovations in Developing Countries: Evidence from Firm-Level Surveys," Journal of Development Studies, Taylor & Francis Journals, vol. 44(5), pages 701-727.
    11. Almeida, Rita & Aterido, Reyes, 2008. "The incentives to invest in job training : do strict labor codes influence this decision?," Social Protection Discussion Papers and Notes 46189, The World Bank.
    12. Ferreira, Francisco H. G. & Leite, Phillippe G. & Wai-Poi, Matthew, 2007. "Trade liberalization, employment flows, and wage inequality in Brazil," Policy Research Working Paper Series 4108, The World Bank.
    13. Ricardo Paes de Barros & Carlos Henrique Corseuil, 2001. "The Impact of Regulations on Brazilian Labor Market Performance," IDB Publications (Working Papers) 43198, Inter-American Development Bank.
    14. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    15. Pagés, Carmen & Madrigal, Lucía, 2008. "Is Informality a Good Measure of Job Quality?: Evidence from Job Satisfaction Data," IDB Publications (Working Papers) 1098, Inter-American Development Bank.
    16. Carmen Pages & Lucia Madrigal, 2008. "Is Informality a Good Measure of Job Quality? Evidence from Job Satisfaction Data," Research Department Publications 4603, Inter-American Development Bank, Research Department.
    17. Gustavo Gonzaga, 2003. "Labor Turnover and Labor Legislation in Brazil," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2003), pages 165-222, August.
    18. Marcela Eslava & John Haltiwanger & Adriana Kugler & Maurice Kugler, 2010. "Factor Adjustments after Deregulation: Panel Evidence from Colombian Plants," The Review of Economics and Statistics, MIT Press, vol. 92(2), pages 378-391, May.
    19. Timothy Besley & Robin Burgess, 2004. "Can Labor Regulation Hinder Economic Performance? Evidence from India," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 119(1), pages 91-134.
    20. Amil Petrin & Jagadeesh Sivadasan, 2006. "Job Security Does Affect Economic Efficiency: Theory, A New Statistic, and Evidence from Chile," NBER Working Papers 12757, National Bureau of Economic Research, Inc.
    21. Kugler, Adriana D., 2005. "Wage-shifting effects of severance payments savings accounts in Colombia," Journal of Public Economics, Elsevier, vol. 89(2-3), pages 487-500, February.
    22. Florencia Lopez Boo & Lucia Madrigal & Carmen Pages, 2010. "Part-Time Work, Gender and Job Satisfaction: Evidence from a Developing Country," Journal of Development Studies, Taylor & Francis Journals, vol. 46(9), pages 1543-1571.
    23. Rosen, Sherwin, 1974. "Hedonic Prices and Implicit Markets: Product Differentiation in Pure Competition," Journal of Political Economy, University of Chicago Press, vol. 82(1), pages 34-55, Jan.-Feb..
    24. Adriana D. Kugler, 2004. "The Effect of Job Security Regulations on Labor Market Flexibility. Evidence from the Colombian Labor Market Reform," NBER Chapters, in: Law and Employment: Lessons from Latin America and the Caribbean, pages 183-228, National Bureau of Economic Research, Inc.
    25. James J. Heckman & Carmen Pagés, 2004. "Law and Employment: Lessons from Latin America and the Caribbean," NBER Books, National Bureau of Economic Research, Inc, number heck04-1.
    26. David H. Autor & William R. Kerr & Adriana D. Kugler, 2007. "Does Employment Protection Reduce Productivity? Evidence From US States," Economic Journal, Royal Economic Society, vol. 117(521), pages 189-217, June.
    27. Sergio Firpo & Sandro Carvalho & Renan Pieri, 2016. "Using occupational structure to measure employability with an application to the Brazilian labor market," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 14(1), pages 1-19, March.
    28. Meghir, Costas & Whitehouse, Edward, 1996. "The Evolution of Wages in the United Kingdom: Evidence from Micro Data," Journal of Labor Economics, University of Chicago Press, vol. 14(1), pages 1-25, January.
    29. Heckman, James J. & Pages, Carmen (ed.), 2004. "Law and Employment," National Bureau of Economic Research Books, University of Chicago Press, edition 1, number 9780226322827.
    30. 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.
    31. Almeida, Rita & Carneiro, Pedro, 2008. "Mandated benefits, employment, and inequality in a dual economy," Social Protection Discussion Papers and Notes 45051, The World Bank.
    32. Maloney, William F., 2004. "Informality Revisited," World Development, Elsevier, vol. 32(7), pages 1159-1178, July.
    33. Ahsan, Ahmad & Pagés, Carmen, 2009. "Are all labor regulations equal? Evidence from Indian manufacturing," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 62-75, March.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Viollaz, Mariana, 2016. "Enforcement of Labor Market Regulations: Heterogeneous Compliance and Adjustment across Gender," MPRA Paper 72000, University Library of Munich, Germany.
    2. Renata Narita, 2020. "Self-Employment in Developing Countries: A Search-Equilibrium Approach," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 35, pages 1-34, January.
    3. Mariana Viollaz, 2016. "Are Labor Inspections Protecting Workers’ Rights? Adding the Evidence from Size-based Labor Regulations and Fines in Peru," CEDLAS, Working Papers 0205, CEDLAS, Universidad Nacional de La Plata.
    4. Mariana VIOLLAZ, 2018. "Are labour inspections effective when labour regulations vary according to the size of the firm? Evidence from Peru," International Labour Review, International Labour Organization, vol. 157(2), pages 213-242, June.
    5. Mariana Viollaz, 2018. "Enforcement of labor market regulations: heterogeneous compliance and adjustment across gender," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 7(1), pages 1-28, December.
    6. Mariana Viollaz, 2019. "Multiple Violations of Labor Market Regulations: Patterns in the Peruvian Labor Market and the Impact of Enforcement," CEDLAS, Working Papers 0244, CEDLAS, Universidad Nacional de La Plata.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Almeida, Rita & Carneiro, Pedro, 2008. "Mandated benefits, employment, and inequality in a dual economy," Social Protection Discussion Papers and Notes 45051, The World Bank.
    2. Almeida, Rita K. & Poole, Jennifer P., 2017. "Trade and labor reallocation with heterogeneous enforcement of labor regulations," Journal of Development Economics, Elsevier, vol. 126(C), pages 154-166.
    3. Rita Almeida & Pedro Carneiro, 2012. "Enforcement of Labor Regulation and Informality," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 64-89, July.
    4. Adriana D. Kugler, 2019. "Impacts of Labor Market Institutions and Demographic Factors on Labor Markets in Latin America," IMF Working Papers 2019/155, International Monetary Fund.
    5. Kaplan, David S., 2009. "Job creation and labor reform in Latin America," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 91-105, March.
    6. Adriana Kugler & Maurice Kugler, 2009. "Labor Market Effects of Payroll Taxes in Developing Countries: Evidence from Colombia," Economic Development and Cultural Change, University of Chicago Press, vol. 57(2), pages 335-358, January.
    7. Adriana D. Kugler & Maurice D. Kugler & Luis O. Herrera-Prada, 2017. "Do Payroll Tax Breaks Stimulate Formality? Evidence from Colombia’s Reform," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2017), pages 3-40, November.
    8. Holzmann, Robert & Pouget, Yann & Vodopivec, Milan & Weber, Michael, 2011. "Severance Pay Programs around the World: History, Rationale, Status, and Reforms," IZA Discussion Papers 5731, Institute of Labor Economics (IZA).
    9. Betcherman, Gordon, 2014. "Labor market regulations : what do we know about their impacts in developing countries ?," Policy Research Working Paper Series 6819, The World Bank.
    10. Reyes Aterido & Mary Hallward-Driemeier & Carmen Pagés, 2011. "Big Constraints to Small Firms' Growth? Business Environment and Employment Growth across Firms," Economic Development and Cultural Change, University of Chicago Press, vol. 59(3), pages 609-647.
    11. Richard B. Freeman, 2009. "Labor Regulations, Unions, and Social Protection in Developing Countries: Market distortions or Efficient Institutions?," NBER Working Papers 14789, National Bureau of Economic Research, Inc.
    12. Almeida, Rita & Carneiro, Pedro, 2006. "Enforcement of Regulation, Informal Labour, Firm Size and Firm Performance," CEPR Discussion Papers 5976, C.E.P.R. Discussion Papers.
    13. Almeida, Rita K. & Carneiro, Pedro, 2005. "Enforcement of Regulation, Informal Labor and Firm Performance," IZA Discussion Papers 1759, Institute of Labor Economics (IZA).
    14. Djankov, Simeon & Ramalho, Rita, 2009. "Employment laws in developing countries," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 3-13, March.
    15. Arias, Omar & Blom, Andreas & Bosch, Mariano & Cunningham, Wendy & Fiszbein, Ariel & Lopez Acevedo, Gladys & Maloney, William & Saavedra, Jaime & Sanchez-Paramo, Carolina & Santamaria, Mauricio & Siga, 2005. "Pending issues in protection, productivity growth, and poverty reduction," Policy Research Working Paper Series 3799, The World Bank.
    16. Romain Duval & Prakash Loungani, 2021. "Designing Labor Market Institutions in Emerging Market and Developing Economies: A Review of Evidence and IMF Policy Advice," Comparative Economic Studies, Palgrave Macmillan;Association for Comparative Economic Studies, vol. 63(1), pages 31-83, March.
    17. Almeida, Rita & Carneiro, Pedro, 2005. "Enforcement of labor regulation, informal labor, and firm performance," Policy Research Working Paper Series 3756, The World Bank.
    18. Parsons, Donald O., 2011. "Mandated Severance Pay and Firing Cost Distortions: A Critical Review of the Evidence," IZA Discussion Papers 5776, Institute of Labor Economics (IZA).
    19. Robalino, David & Vodopivec, Milan & Bodor, Andras, 2009. "Savings for unemployment in good or bad times : options for developing countries," Social Protection Discussion Papers and Notes 50320, The World Bank.
    20. Milan Vodopivec, 2013. "Introducing unemployment insurance to developing countries," IZA Journal of Labor Policy, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 2(1), pages 1-23, December.

    More about this item

    Keywords

    Enforcement of labor regulations; Informal sector; Job quality;
    All these keywords.

    JEL classification:

    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J3 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs
    • K31 - Law and Economics - - Other Substantive Areas of Law - - - Labor Law
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:spa:wpaper:2013wpecon22. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Pedro Garcia Duarte (email available below). General contact details of provider: https://edirc.repec.org/data/deuspbr.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.