Training, average wages and taxes as factors that explain the attitude toward job regulation in contexts of informality

Abstract

The hiring of illegitimate staff is a widespread problem across small and midsize enterprises, affecting the wages of those working within the bounds of the law. For that reason, the objective of the study was to validate a model that explains the attitudes towards labor regulation. Two hypotheses were tested: a) professional training mediates the relationship between educational level and attitude toward labor regulation; b) average wage and attitude toward tax regulation predict attitude towards labor regulation. It is a cross-sectional study. The conceptual model of exploratory nature works with two data collection tools: the National Survey of Enterprises (ENE) 2015 and structured interviews applied to Peruvian SME owners. For ENE 2015 it was used one-step stratified sampling. The quantitative analysis was carried out with PLS-SEM (Partial Least Squares – Structural Equation Modeling), a technique for structural modeling that maximizes the variance; for the qualitative analysis, the terMEXt program was used. The proposed causal routes for the two hypotheses explained a moderately high proportion of the two variables belonging to the conceptual model, training received (R2 = 0.396) and attitude toward labor regulation (R2 = 0.448). This study contributes to understanding the informal culture within SMEs. The application of this approach in other sectors is recommended to improve attitudes towards labor reforms.