Employment Preferences of Favela Residents

Mayara Felix, Beatriz Marcoje, Ieda Matavelli and Maria Clara Rodrigues
Additional contact information
Mayara Felix: Yale University
Beatriz Marcoje: Universidade Federal Fluminense
Ieda Matavelli: CERGE-EI
Maria Clara Rodrigues: Yale University

No 2519, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We document employment preferences of workers at the margin of informality using open-ended questions and discrete choice experiments in Brazil's largest favela complex. Stated preferences emphasize pay and tangible job benefits rather than meaning or purpose, while primary complaints center on poor management, customers, and inflexible schedules. Workers exhibit high valuations for all formal sector amenities on averageÑunemployment insurance, parental leave, and termination noticeÑas well as for learning opportunities, but lower for non-formal sector amenities such as shorter commutes. Valuations vary systematically by employment sector in ways consistent with sorting: formal workers value formal amenities most, the self-employed value them least or not at all, and the informally employed exhibit mixed valuations. These patterns are also consistent with learning and endowment effects, for which we find suggestive evidence.

Pages: 6 pages
Date: 2026-01-01
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