Arbeitspapier

Enforcement of labor regulation and informality

Enforcement of labor regulations in the formal sector may drive workers to informality because they increase the costs of formal labor. But better compliance with mandated benefits makes it attractive to be a formal employee. We show that, in locations with frequent inspections workers pay for mandated benefits by receiving lower wages. Wage rigidity prevents downward adjustment at the bottom of the wage distribution. As a result, lower paid formal sector jobs become attractive to some informal workers, inducing them to want to move to the formal sector.

Sprache
Englisch

Erschienen in
Series: IZA Discussion Papers ; No. 5902

Klassifikation
Wirtschaft
Thema
informality
labor regulation

Ereignis
Geistige Schöpfung
(wer)
Almeida, Rita K.
Carneiro, Pedro
Ereignis
Veröffentlichung
(wer)
Institute for the Study of Labor (IZA)
(wo)
Bonn
(wann)
2011

Handle
URN
urn:nbn:de:101:1-201108152092
Letzte Aktualisierung
10.03.2025, 11:44 MEZ

Datenpartner

Dieses Objekt wird bereitgestellt von:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. Bei Fragen zum Objekt wenden Sie sich bitte an den Datenpartner.

Objekttyp

  • Arbeitspapier

Beteiligte

  • Almeida, Rita K.
  • Carneiro, Pedro
  • Institute for the Study of Labor (IZA)

Entstanden

  • 2011

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