Enforcement of regulation, informal labor and firm performance
By: by Rita K. Almeida, Pedro Carneiro.
Contributors: Carneiro, Pedro.
Series: Discussion paper ;; no. 1759; Discussion paper (Forschungsinstitut zur Zukunft der Arbeit : Online) ;; no. 1759
Publisher: IZA
Published: 2005
Place of publication: Bonn, Germany
Language: eng
Format: Electronic resource
Subjects: Informal sector (Economics); Labor productivity
Description: "This paper investigates how enforcement of labor regulation affects the firm's use of informal employment and its impact on firm performance. Using firm level data on informal employment and firm performance, and administrative data on enforcement of regulation at the city level, we show that in areas where law enforcement is stricter firms employ a smaller amount of informal employment. Furthermore, by reducing the firm's access to unregulated labor, stricter enforcement also decreases average wages, productivity and investment. Our results are robust to several specification changes, and to instrumenting enforcement with 1) measures of access of labor inspectors to firms and 2) measures of general law enforcement in the area where the firm is located"--Forschungsinstitut zur Zukunft der Arbeit web site.
Notes: Also available in print.
Includes bibliographical references.
Title from PDF file as viewed on 9/28/2005.
System requirements: Adobe Acrobat Reader.
Mode of access: World Wide Web.