Enforcement of Labor Regulation and the Labor Market Effects of Trade: Evidence from Brazil
Gabriel Ulyssea () and
Vladimir Ponczek ()
Additional contact information
Vladimir Ponczek: Sao Paulo School of Economics
No 11783, IZA Discussion Papers from Institute of Labor Economics (IZA)
How does enforcement of labor regulations shape the labor market effects of trade? To tackle this question, we exploit the Brazilian trade liberalization episode and exogenous variation in the intensity of both the trade shock and enforcement across local labor markets. Regions with stricter enforcement observed no increase in informal employment but large disemployment effects. Regions with weaker enforcement had no employment losses but substantial increases in informality. All effects are concentrated on unskilled workers, with no effects on skilled workers. The results indicate that informality acts as a buffer that reduces trade-induced adjustment costs in the labor market.
Keywords: trade; enforcement of labor regulations; informality (search for similar items in EconPapers)
JEL-codes: F16 J46 K31 (search for similar items in EconPapers)
Pages: 46 pages
New Economics Papers: this item is included in nep-dev, nep-int, nep-iue, nep-law and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp11783
Ordering information: This working paper can be ordered from
IZA, Margard Ody, P.O. Box 7240, D-53072 Bonn, Germany
Access Statistics for this paper
More papers in IZA Discussion Papers from Institute of Labor Economics (IZA) IZA, P.O. Box 7240, D-53072 Bonn, Germany. Contact information at EDIRC.
Bibliographic data for series maintained by Holger Hinte ().