Labor Market Regulations and the Duration of Employment in Brazil

Barros, Ricardo Paes de; Corseuil, Carlos Henrique Leite; Bahia, Mônica

doi:10.2139/ssrn.193475

Cited by 15 publications

(12 citation statements)

References 2 publications

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“…Much has been written on the perverse incentives coming from the nature of the legislation on dismissal costs in Brazil (see, among others, Macedo (1985), Camargo (1996), Amadeo and Camargo (1996), Gonzaga (1998), and Barros, Corseuil and Bahia (1999)). The basic argument made by these authors is that the design of the legislation gives strong incentives for workers to induce their own dismissal.…”

Section: Ii3 Perverse Incentives Implied By the Legislation On Dismimentioning

confidence: 99%

“…Barros, Corseuil and Bahia (1999) analyze data on complete employment spells on the previous job for those currently unemployed from Pesquisa Mensal de Emprego (PME, IBGE), a monthly household survey that covers the six main metropolitan regions in Brazil. 21 The data has information on employment duration of the previous job, reason for separation (layoffs or quits), on whether it was a formal or an informal job (with or without a working card), and on whether the individual withdrew her FGTS balance (this question was only asked for formal workers).…”

Section: Iii3 Studies That Analyze the Perverse Incentives And The 1mentioning

confidence: 99%

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Labor Turnover and Labor Legislation in Brazil

Gonzaga¹

2003

Economía

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One of the main characteristics of the Brazilian labor market is its impressively high job and worker turnover rates. Although labor legislation in Brazil is very restrictive, dismissal costs are not high when compared with other Latin American countries. Moreover, many authors argue that the design of some job security programs creates perverse incentives that generate labor turnover. The objective of this paper is twofold. First, we describe Brazilian labor legislation, with emphasis on job security provisions and their incentives on workers reallocation. Then, after reviewing the most recent evidence on labor turnover in Brazil, we investigate the effects of changes in job termination costs implemented in the 1988 Constitution and in a Labor Law of September 2001 on employment duration. Both legislation changes increased firing costs and should have, therefore, reduced turnover for formal workers affected by them. A simple differences-indifferences methodology is applied to monthly individual data from Pesquisa Mensal de Emprego (PME, IBGE), which has information on previous employment spells for those currently unemployed. The results establish that both changes reduced turnover for formal workers affected by the legislation. A significant increase in average employment duration of affected workers relative to not affected workers was observed after both legislation changes. We also provided evidence that the 1988 Constitutional change reduced the probability of fake layoffs, although there are still a high number of such agreements being made between workers and their employers.

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Section: Ii3 Perverse Incentives Implied By the Legislation On Dismimentioning

confidence: 99%

Section: Iii3 Studies That Analyze the Perverse Incentives And The 1mentioning

confidence: 99%

Labor Turnover and Labor Legislation in Brazil

Gonzaga¹

2003

Economía

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“…Por fim, têm-se, na última sessão, as considerações finais. Barros et al (1999), é identificado tanto na admissão quanto na demissão do trabalhador. Os principais custos associados à admissão dizem respeito à seleção e ao treinamento de pessoal, enquanto os custos de demissão seriam basicamente associados ao custo financeiro (multa de 50% do FGTS).…”

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“…Devem-se, no entanto, levar também em consideração o custo de oportunidade e a queda na produtividade acarretada pela rotatividade indesejada do trabalhador. Amadeo e Camargo (1996) e Barros et al (1999) argumentam que tais custos quase sempre têm efeito inverso do planejado, contribuindo para elevar ainda mais a rotatividade no país, como, por exemplo, a aplicação da multa do FGTS, que pode estimular o trabalhador a induzir a própria demissão visando ao recebimento dos recursos do FGTS. Tal peculiaridade é apontada como um dos principais obstáculos à geração de emprego e à redução da informalidade no país.…”

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Relação entre o tipo de contrato de trabalho e a dedicação do trabalhador no emprego: evidências para as regiões metropolitanas brasileiras

Menezes¹,

Monte

2013

Nova econ.

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Este artigo analisa a relação entre dedicação/esforço do trabalhador no emprego e vínculo contratual. Parte-se da hipótese de que o tipo de vínculo contratual de trabalho poderia implicar incentivos adicionais de esforço. Por meio dos microdados da Pesquisa Mensal de Emprego (PME), de 2006 e 2007, utilizou-se como proxy de esforço as informações relativas à subocupação, à subremuneração e à falta ao trabalho. Inicialmente, observou-se que existem diferenças significativas de perfil entre os trabalhadores, conforme o seu vínculo contratual. Em seguida, os resultados das estimações mostraram que a disposição do trabalhador se altera conforme seja a proxy de dedicação utilizada. De modo geral, os trabalhadores temporários não costumam a disponibilizar horas extras de trabalho e têm chances maiores de serem subremunerados. Por fim, as estimações feitas não indicam mudança significativa de comportamento entre os trabalhadores, caso se modifique o seu vínculo contratual.

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“…In the past, such incentives are likely to have been quite strong due the size of the amounts involved and low or even negative returns to the fund. 15 Barros et al (1999) exploit the 1988 reform that increased the firing penalty from 10 to 40% to analyse the impact of FGTS on worker turnover. More specifically, they adopt a difference-in-differences approach that exploits the differential impact of the reform between workers that are eligible to an indemnity upon dismissal and those who are not (informal sector workers, formal-sector workers with less than three months of tenure and quits).…”

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confidence: 99%

The Labour Market Effects of Unemployment Compensation in Brazil

Hijzen

2011

OECD Social, Employment and Migration Working Papers

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This paper analyses the impact of unemployment insurance and severance pay on the duration of nonemployment and transitions from non-employment to formal salaried employment, informal salaried employment and self-employment. It makes use of panel data from the Pesquisa Mensal de Emgrego, a monthly survey for six large cities in Brazil, for the period 2002M3 to 2010M10. The impact of income support to job losers is identified by means of a difference-in-differences approach that exploits eligibility conditions for income support in combination with proportional hazard models that take account of the spell-based nature of the data. A key aspect of the analysis is that it attempts to assess the role of moral hazard while controlling for the role of liquidity effects. The aggregate results indicate that income support has an important impact on the duration of non-employment. This largely appears to be driven by liquidity effects, while the role of moral hazard is limited. By contrast, the analysis by destination state suggests that moral hazard effects dominate liquidity effects associated with income support. The apparent inconsistency between the two sets of results is due to the fact that the aggregate analysis only accounts for moral hazard effects that increase the duration of nonemployment, while the analysis by destination state captures both moral hazard effects in the form of reduced work incentives per se and those in the form of increased incentives to work informally during the period of benefit receipt. In practice, the latter effect may reflect the tendency for firms to employ benefit recipients informally until their benefits expire. Ce document analyse l’impact de l’assurance chômage et des indemnités de licenciement sur la durée du chômage et la transition vers un emploi salarié dans le secteur formel ou informel, ou vers un emploi indépendant. L’analyse repose sur des données de panel comprises entre M3 2003 et M10 2010 tirées de l’enquête mensuelle sur l’emploi Pesquisa Mensal de Emprego qui concerne six grande zone urbaines du Brésil. Le test de l’incidence du soutien de revenu pour les chômeurs s’appuie sur la méthode de la différence des différences, exploitant les conditions d’éligibilité aux indemnités de soutien de revenu en combinaison avec des modèles de risque proportionnels qui tiennent compte de la nature épisodique des données. Un point essentiel de l’analyse est de tenter d’évaluer le rôle de l’aléa moral tout en tenant compte du rôle des effets de liquidités. Les résultats au niveau agrégé indiquent que le soutien des revenus a un impact important sur la durée du chômage. Il semble que ce résultat soit largement dû aux effets de liquidités, le rôle de l’aléa moral étant limité. En revanche, l’analyse par type d’emploi retrouvé suggère que les effets d’aléa moral dominent les effets de liquidité associés à la garantie de revenu. Cette contradiction apparente entre les deux groupes de résultats s’explique par le fait que l’analyse au niveau agrégé ne prend en compte que les effets d’al...

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Labor Market Regulations and the Duration of Employment in Brazil

Cited by 15 publications

References 2 publications

Labor Turnover and Labor Legislation in Brazil

Labor Turnover and Labor Legislation in Brazil

Relação entre o tipo de contrato de trabalho e a dedicação do trabalhador no emprego: evidências para as regiões metropolitanas brasileiras

The Labour Market Effects of Unemployment Compensation in Brazil

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