Informality in labor market and welfare

The neoclassical growth model with two sectors in production is employed in this paper in order to investigate how a change in the tax structure affects informality and welfare. We calibrate and simulate the model and find that welfare always increases when we reduce the tax rate on the demand for labor and adjust the tax rate on the value added so that the government revenue remains constant.

Segmentation in the brazilian labor market

This paper measures the degree of segmentation in the brazilian labor market. Controlling for observable and unobservable characteristics, workers earn more in the formal sector, which supports the segmentation hypothesis. We break down the degree of segmentation by socio-economic attributes to identify the groups where this phenomenon is more prevalent. We investigate the robustness of our findings to the inclusion of self-employed individuals, and apply a two-stage panel probit model using the self-selection correction strategy to investigate a potential weakness of the fixed-effects estimator

From public to private : the performance of former public workers in the Brazilian labor market

This paper analyzes the placement in the private sector of a subset of Brazilian public-sector employees. This group left public employment in the mid-1990’s through a voluntary severance program. This paper contrasts their earnings before and after quitting the public sector, and compares both sets of wages to public and private sector earnings for similar workers. We find that participants in this voluntary severance program suffered a significant reduction in average earnings wage and an increase in earnings dispersion. We test whether the reduction in average earnings and the increase in earnings dispersion is the expected outcome once one controls for observed characteristics, by means of counterfactual simulations. Several methods of controlling for observed characteristics (parametric and non-parametrically) are used for robustness. The results indicate that this group of workers was paid at levels below what would be expected given their embodied observable characteristics.

Computerization, occupational tasks and the labor market : evidence from a natural experiment in Brazil

A hipótese de “rotinização" ou estabelece que computadores substituem tarefas rotineiras e complementam tarefas abstratas não rotineiras. Essa dissertação de mestrado test algumas predições naturais sobre o impacto “rotinização" sobre o mercado de trabalho de uma grande economia em desenvolvimento. Uso o final da política de reserva de mercado para mini e micro-computador (Outubro de 1992) como um experimento natural que gera variação exógena nos preços de tecnologia para identificar os efeitos do uso de computadores em salários e insumos de trabalho. Conjuntamente, os resultados contribuem para a crescente literatura sobre “perspectiva das tarefas" por trazer implicações testáveis de um queda exógena de preços de computador em um contexto com uma estratégia de identificação crível.

Brazil: the pressure points in labor legislation

Brazil’s experience shows that the economic and political history of a country is a critical determinant of which labor laws influence wages and employment, and which are not binding. Long periods of high inflation, illiteracy of the workforce, and biases in the design and enforcement of labor legislation bred by the country’s socioeconomic history are all important in determining the reach of labor laws. Defying conventional wisdom, these factors are shown to affect labor market outcomes even in the sector of employment regarded as unregulated. Following accepted practice in Brazil, we distinguish regulated from unregulated employment by determining whether or not the contract has been ratified by the Ministry of Labor, viz., groups of workers with and without signed work booklet. We then examine the degree of adherence to labor laws in the formal and informal sectors, and finds “pressure points” – viz., evidence of the law on minimum wage, work-hours, and payment timing being binding on outcomes – in both the formal and informal sectors of the Brazilian labor market. The findings of the paper imply that in terms of the design of legislation, informality in Brazil is mainly a fiscal, and not a legal phenomenon. But the manner in which these laws have been enforced is also critical determinant of informality in Brazil: poor record-keeping has strengthened the incentives to stay informal that are already built into the design of the main social security programs, and ambiguities in the design of labor legislation combined with slanted enforcement by labor courts have led to workers effectively being accorded the same labor rights whether or not they have ratified contracts. The incentives to stay informal are naturally higher for workers who are assured of protection under labor legislation regardless of the nature of their contract, which only alters their financial relationship with the government. The paper concludes that informality in Brazil will remain high as long as labor laws remain ambiguous and enforced with a clear pro-labor bias, and social security programs lack tight benefitcontribution linkages and strong enforcement mechanisms.

Microeconomic instability and children's human capital accumulation: the effects of idiosyncratic shocks to father's income on child labor, school drop-outs and repetition rates in Brazil

This paper evaluates the long-run effects of economic instability. In particular, we study the impact of idiosyncratic shocks to father’s income on children’s human capital accumulation variables such as school drop-outs, repetition rates and domestic and non-domestic labor. Although, the problem of child labor in Brazil has declined greatly during the last decade, the number of children working is still substantial. The low levels of educational attainment in Brazil are also a main cause for concern. The large rotating panel data set used allows for the estimation of the impacts of changes in occupational and income status of fathers on changes in his child’s time allocation circumstances. The empirical analysis is restricted to families with fathers, mothers and at least one child between 10 and 15 years of age in the main Brazilian metropolitan areas during the 1982-1999 period. We perform logistic regressions controlling for child characteristics (gender, age, if he/she is behind in school for age), parents characteristics (grade attainment and income) and time and location variables. The main variables analyzed are dynamic proxies of impulses and responses, namely: shocks to household head’s income and unemployment status, on the one hand and child’s probability of dropping out of school, of repeating a grade and of start working, on the other. The findings suggest that father’s income has a significant positive correlation with child’s dropping out of school and of repeating a grade. The findings do not suggest a significant relationship between a father’s becoming unemployed and a child entering the non-domestic labor market. However, the results demonstrate a significant positive relationship between a father becoming unemployed and a child beginning to work in domestic labor. There was also a positive correlation between father becoming unemployed and a child dropping out and repeating a grade. Both gender and age were highly significant with boys and older children being more likely to work, drop-out and repeat grades.

Gestão contemporânea de carreira: um estudo de caso com peritos criminais do Instituto Nacional de Criminalística da Polícia Federal

Nas últimas três décadas, intensificou-se na academia o debate sobre o tema gestão de carreiras. As transformações sociais, econômicas, tecnológicas e sua influência sobre o mercado de trabalho aguçaram o interesse dos pesquisadores organizacionais em entender como os indivíduos conduzem suas carreiras nesse novo cenário. A noção da responsabilidade pessoal na administração da própria carreira torna-se relevante, diminuindo o papel da organização nesse processo. Flexibilidade, autoconhecimento e abertura à mobilidade no trabalho são novos requisitos. Surgem na literatura dois modelos que bem expressam essa realidade: a carreira proteana e sem fronteiras. Este estudo teve como objetivo explorar de que forma servidores públicos federais da área de segurança pública – os peritos criminais do Instituto Nacional de Criminalística da Polícia Federal – gerenciam suas carreiras à luz de tais fenômenos, considerando o ambiente organizacional tradicional no qual estão imersos. Aspectos de comprometimento e entrincheiramento na carreira também foram considerados. Optou-se pela estratégia qualitativa com uso de estudo de caso e pesquisa documental. Foram realizadas onze (11) entrevistas em profundidade, cujo conteúdo foi analisado de acordo com uma grade temática pré-estabelecida. Os resultados revelam que atitudes de carreira proteana e sem fronteiras são identificadas mesmo com a rigidez do modelo administrativo de carreira do serviço público federal. Além disso, há indícios de entrincheiramento voluntário na carreira, sem, no entanto, afetar o comprometimento com a carreira. A pesquisa pretende abrir novas possibilidades de entendimento sobre o tema no setor público, em especial na área de segurança pública, considerando as peculiaridades de suas carreiras.

Child labor and learning

This paper investigates the impact of working while in school on learning outcomes through the use of a unique micro panel dataset of Brazilian students. The potential endogeneity is addressed through the use of di erence-in-di erence and instrumental variable estimators. A negative e ect of working on learning outcomes in both math and Portuguese is found. The e ects of child work range from 3% to 8% of a standard deviation decline in test score which represents a loss of about a quarter to a half of a year of learning on average. We also explore the minimum legal age to entry in the labor market to induce an exogenous variation in child labor status. The results reinforce the detrimental e ects of child labor on learning. Additionally, it is found that this e ect is likely due to the interference of work with the time kids can devote to school and school work.

Labor supply, risk aversion and economic refrom in China

Economic reform in China has created a small, but fast-growing private sector that has spurred rapid productivity growth. Growth of the private sector is predicated upon continued labor movements away from state-run industries and into private firms. This paper presents a theory of labor market sectoral choice demonstrating that three factors determine private sector labor supply-the difference in wages between the state and private sectors, private sector wage risk and risk aversion. Estimation of the model using survey data provides strong support for the theory. We find that the riskiness of private sector earnings has a greater effect in discouraging workers from taking jobs in private firms than the wage premi um has in attracting workers.

Labor earnings dynamics in post-stabilization Brazil

This paper analyzes both the levels and evolution of wage inequality in the Brazilian formal labor market using administrative data from the Brazilian Ministry of Labor (RAIS) from 1994 to 2009. After the covariance structure of the log of real weekly wages is estimated and the variance of the log of real weekly wages is decomposed into its permanent and transitory components, we verify that nearly 60% of the inequality within age and education groups is explained by the permanent component, i.e., by time-invariant individual productive characteristics. During this period, wage inequality decreased by 29%. In the rst years immediately after the macroeconomic stabilization (1994

The effects of longevity and distortions on education and retirement

This article studies the impact of longevity and taxation on life-cycle decisions and long-run income. Individuals allocate optimally their total lifetime between education, working and retirement. They also decide at each moment how much to save or consume out of their income, and after entering the labor market how to divide their time between labor and leisure. The model incorporates experience-earnings profiles and the return-to-education function that follows evidence from the labor literature. In this setup, increases in longevity raises the investment in education - time in school - and retirement. The model is calibrated to the U.S. and is able to reproduce observed schooling levels and the increase in retirement, as the evidence shows. Simulations show that a country equal to the U.S. but with 20% smaller longevity will be 25% poorer. In this economy, labor taxes have a strong impact on the per capita income, as it decreases labor effort, time at school and retirement age, in addition to the general equilibrium impact on physical capital. We conclude that life-cycle effects are relevant in analyzing the aggregate outcome of taxation.