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.
- Language
-
Englisch
- Bibliographic citation
-
Series: IZA Discussion Papers ; No. 5902
- Classification
-
Wirtschaft
- Subject
-
informality
labor regulation
- Event
-
Geistige Schöpfung
- (who)
-
Almeida, Rita K.
Carneiro, Pedro
- Event
-
Veröffentlichung
- (who)
-
Institute for the Study of Labor (IZA)
- (where)
-
Bonn
- (when)
-
2011
- Handle
- URN
-
urn:nbn:de:101:1-201108152092
- Last update
-
10.03.2025, 11:44 AM CET
Data provider
This object is provided by:
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
ZBW - Deutsche Zentralbibliothek für Wirtschaftswissenschaften - Leibniz-Informationszentrum Wirtschaft. If you have any questions about the object, please contact the data provider.
Object type
- Arbeitspapier
Associated
- Almeida, Rita K.
- Carneiro, Pedro
- Institute for the Study of Labor (IZA)
Time of origin
- 2011
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