This paper investigates the relationship between economic expansion and the degree of formalization for the Brazilian labour market in the recent period. We present a theoretical framework that attempts to explain this relationship through the dynamics of firms hiring strategies. The main predictions are: the share of formal employment rises as the unemployment rate falls, and that the formal-informal wage gap increases, at least at the beginning of the economic expansion. In the empirical part, we use longitudinal microdata from a Brazilian household survey to check whether these two predictions are confirmed. To a large extent our results corroborate both predictions.
CITATION STYLE
Corseuil, C. H. L., & Foguel, M. N. (2012). Economic expansion and increase in labout market formality: A poaching approach. Revista Brasileira de Economia, 66(2), 207–224. https://doi.org/10.1590/S0034-71402012000200004
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