Assessing the impacts of the individual micro-entrepreneur act in Brazil: 10 years later

Abstract

Entrepreneurship is widely acknowledged as a phenomenon of central importance in our society. Within the arena of entrepreneurship policy, a more specific trend has been an increase in recent years in informal entrepreneurship. Therefore, this article seeks to contribute to filling a knowledge gap in the entrepreneurship literature using empirical evidence to assess the impact of the implementation of the Individual Micro Entrepreneur Act on the formalization of small businesses in Brazil ten years after coming into force. Based on empirical data, our study provides evidence that this legislation is being used as a large-scale instrument for labor market deregulation. Additionally, we could also observe a strong increase in the number of Brazilian citizens officially registered as individual micro entrepreneurs, especially in urban areas and focusing on activities, such as hairdressers, manicures, pedicures, masonry works, and sales promotion. Keywords: informal entrepreneurship; firm formalization; public policy; regional development; Brazil