Economic expansion and increase in labout market formality: a poaching approach

Abstract

This paper investigates the relationship between economic expansion and the degree of formalization for the Brazilian labour market in the recent period. We present a theoretical framework that attempts to explain this relationship through the dynamics of firms hiring strategies. The main predictions are: the share of formal employment rises as the unemployment rate falls, and that the formal-informal wage gap increases, at least at the beginning of the economic expansion. In the empirical part, we use longitudinal microdata from a Brazilian household survey to check whether these two predictions are confirmed. To a large extent our results corroborate both predictions

Un Análisis Dinámico De Los Flujos De Entrada a La Formalidad en América Latina

“…Maurizio (2015) usó esta misma metodología para el estudio del proceso de formalización en Argentina y Brasil durante el nuevo milenio. 6 Entre los estudios previos sobre la formalidad laboral en diferentes países de América Latina se encuentran Amarante y Arim (2015); Bertranou et al (2013); Beccaria et al (2015aBeccaria et al ( , 2015b; Berg (2010); Corseuil y Foguel (2012); FORLAC (2014a); Maurizio (2015); Maurizio y Vázquez (2015). 7 El último dato con el cual se cuenta para la región en su conjunto proveniente de OIT es 2014.…”

Transitions to Formality and Declining Inequality: Argentina and Brazil in the 2000s

“…Corsueil and Foguel () also find formality to be pro‐cyclical. They model transitions between formality and informality and also between those states and unemployment in the expansion phases of the cycle.…”

“…Among the few recent studies on labour mobility associated with informality in Argentina and Brazil are Bertranou et al. (); Bosch and Maloney (); Corseuil and Foguel (); Maurizio ().…”

Sharing the Fruits of Growth with all Mexicans

“…As in other Latin America countries (e.g. Argentina, Peru and Ecuador), this significant reduction in the informality rate was driven, on a large extent, by economic growth (Baltar, Krein and Moretto, 2006;Bosch, Goni and Maloney, 2007;Corseuil and Foguel, 2012;Tornarolli et al, 2014). Hence, it is likely that continued emphasis on creating the right conditions for economic growth will lead to further gains in formal employment.…”