Enforcement of Labour Regulation and the Labour Market Effects of Trade: Evidence from Brazil

2021/06/28 by Vladimir Ponczek, Gabriel Ulyssea · 2 citations
Economics, Econometrics and Finance · Social Sciences · #Global trade and economics #Labor Movements and Unions #Taxation and Compliance Studies

paper · pdf · doi:10.1093/ej/ueab052

Abstract

Abstract How does enforcement of labour regulations shape the labour market effects of trade? We combine local economic shocks generated by the unilateral trade liberalisation in Brazil and enforcement variation across regions to show that regions with stricter enforcement observed: (i) lower informality; (ii) larger losses in overall employment; (iii) greater reductions in the number of formal plants. Regions with weaker enforcement experienced opposite effects. All these effects are concentrated on low-skill workers. Our results indicate that greater flexibility introduced by informality allows both formal firms and low-skill workers to cope better with adverse labour market shocks.

Citations

• Estimation of the Parameters of a Single Equation in a Complete System of Stochastic Equations

Cited by

• Trade Liberalization and Mortality Rates: Evidence of Pro‐Cyclical Mortality From Brazil
• Trade Liberalization and Mortality Rates: Evidence of Pro-Cyclical Mortality From Brazil. [europepmc]

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