This paper studies gross worker flows to explain the rising informality in Brazilian metropolitan labor markets from 1983-2002. In particular, we examine the impact of trade and constitutional reforms, (that include increased firing costs, tighter restrictions on overtime work, and fewer restrictions on union activity) occurring during the period. We find aggregate sectoral movements to be driven largely by changes in the hiring rates which, in turn are driven largely by the constitutional reforms. Trade liberalization accounts for roughly 1% of the increase in informality, while the constitutional reforms account for 40-50%. JEL Classification: J23, J38, J63, J65, O17, F16
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