The Determinants of Rising Informality in Brazil : Evidence from Gross Worker Flows
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World Bank, Washington, DC
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This paper studies gross worker flows to
explain the rising informality in Brazilian metropolitan
labor markets from 1983 to 2002. This period covers two
economic cycles, several stabilization plans, a far-reaching
trade liberalization, and changes in labor legislation
through the Constitutional reform of 1988. First, focusing
on cyclical patterns, the authors confirm that for Brazil,
the patterns of worker transitions between formality and
informality correspond primarily to the job-to-job dynamics
observed in the United States, and not to the traditional
idea of the informal queuing for jobs in a segmented market.
However, the analysis also confirms distinct cyclical
patterns of job finding and separation rates that lead to
the informal sector absorbing more labor during downturns.
Second, focusing on secular movements in gross flows and the
volatility of flows, the paper finds the rise in informality
to be driven primarily by a reduction in job finding rates
in the formal sector. A small fraction of this is driven by
trade liberalization, and the remainder seems driven by
rising labor costs and reduced flexibility arising from
Constitutional reform.
Palabras clave
ACCESS TO HEALTH SERVICES, ACCOUNTING, ATTRITION, AVERAGE WAGE, BUSINESS CYCLE, BUSINESS CYCLES, CALCULATIONS, CHECKS, COMPULSORY CONTRIBUTIONS, CONTRIBUTION, CRISES, CURRENCY, DEMAND FOR SERVICES, DEVELOPING COUNTRIES, DEVELOPMENT ECONOMICS, DISGUISED UNEMPLOYMENT, DISMISSAL, DRIVERS, EARNING, EARNINGS, ECONOMIC FLUCTUATIONS, ECONOMIC SLOWDOWN, ELDERLY, EMERGENCY CARE, EMPLOYMENT SPELLS, EQUILIBRIUM UNEMPLOYMENT, ESTIMATED PARAMETERS, EXCHANGE RATE, EXTERNAL SHOCKS, FEDERAL RESERVE, FEWER PEOPLE, FINANCIAL CRISIS, FINDING JOBS, FIRING COSTS, FIRM SIZE, GROSS WAGE, HEALTH CARE, HEALTH CARE REFORM, HEALTH CARE SYSTEM, HEALTH INSURANCE, HEALTH REFORM, HEALTH SECTOR, HEALTH SECTOR REFORM, HEALTH SERVICES, HEALTH SYSTEM, HEALTH SYSTEMS, HOSPITAL, HOSPITAL BEDS, HOUSEHOLD SURVEY, HUMAN RESOURCES, IMMIGRANTS, INCOME, INCOME SOURCE, INDUSTRY CHARACTERISTICS, INFLATION, INFORMAL EMPLOYMENT, INFORMAL LABOR MARKETS, INFORMAL SECTOR, INNOVATIONS, JOB CREATION, JOB DESTRUCTION, JOB DESTRUCTION RATES, JOB SECURITY, JOB SEPARATION, JOBS, LABOR CODE, LABOR CONTRACT, LABOR COSTS, LABOR DEMAND, LABOR ECONOMICS, LABOR FORCE, LABOR LEGISLATION, LABOR MARKET, LABOR MARKET INSTITUTIONS, LABOR MARKET LEGISLATION, LABOR MARKET PERFORMANCE, LABOR MARKET PERSPECTIVE, LABOR MARKET REFORMS, LABOR MARKET RIGIDITIES, LABOR MARKETS, LABOR SUPPLY, LABOR TURNOVER, LABOUR, LABOUR MARKET, LATIN AMERICAN, LAWS, LAYOFFS, MACROECONOMIC FLUCTUATIONS, MANAGEMENT OF HEALTH, MARKET SHARE, MATERNITY LEAVE, MAXIMUM CONTRIBUTIONS, MEDICAL CARE, MIGRATION, MINIMUM PENSIONS, MINIMUM WAGES, MINISTRY OF HEALTH, MOTIVATION, NATURE OF HEALTH, NEW JOBS, NUMBER OF WORKERS, OLD-AGE, ORGANIZED LABOR, PENSION, PENSIONS, POLICY REGIME, POLICY RESEARCH, POLICY RESEARCH WORKING PAPER, POLITICAL ECONOMY, POPULATION GROWTH, PRELIMINARY ANALYSIS, PREVIOUS JOB, PREVIOUS WORK, PRIVATE FIRMS, PRIVATE SECTOR, PROBABILITIES, PROBABILITY, PRODUCTIVITY, PROGRESS, PROTECTION RATE, PUBLIC HEALTH, PUBLIC HEALTH SERVICES, PUBLIC HOSPITALS, QUESTIONNAIRE, REASSIGNMENT, RECESSION, RENTS, REPRODUCTIVE HEALTH, RESPECT, RETIREMENT, RETIREMENT DECISION, RURAL AREAS, SALARIED EMPLOYMENT, SALARIED WORKERS, SALARIES, SALARY, SCHOOL HOURS, SELF EMPLOYED, SELF EMPLOYMENT, SELF-EMPLOYMENT, SERVICE PROVISION, SOCIAL PROTECTION, SOCIAL SECURITY, SOCIAL SECURITY CONTRIBUTIONS, SOCIAL SERVICES, STOCKS, TERMINATION, TOTAL EMPLOYMENT, TRADE LIBERALIZATION, TRADE REFORMS, UNEMPLOYED, UNEMPLOYMENT BENEFIT, UNEMPLOYMENT RATE, UNEMPLOYMENT RATES, UNION DENSITY, UNIONS, UNIVERSAL ACCESS, UNPAID FAMILY WORKERS, UNSKILLED WORKERS, URBAN AREAS, URBAN DWELLERS, VACATION PAY, WAGE FLEXIBILITY, WAGE GAP, WAGE RATE, WAGE RIGIDITIES, WORK FORCE, WORKER, WORKERS, WORKFORCE, WORKING AGES, WORKING HOURS, YEARS OF SERVICES