Economic expansion and increase in labout market formality: a poaching approach
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 prediction...
| Main Authors: | , |
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| Format: | Article |
| Language: | English |
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Fundação Getúlio Vargas
2012-06-01
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| Series: | Revista Brasileira de Economia |
| Subjects: | |
| Online Access: | http://www.scielo.br/scielo.php?script=sci_arttext&pid=S0034-71402012000200004&lng=en&tlng=en |
| Summary: | 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. |
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| ISSN: | 1806-9134 |