Parra, Brenda Samaniego de la and Bujanda, León Fernández
Increasing the cost of informal employment: Evidence from Mexico - American Economic Journal: Applied Economics - 16(1), Jan, 2024: p.377-411
We estimate the effect of increasing the cost of informal jobs on formal firms' and workers' outcomes. We combine administrative records and household surveys and exploit exogenous variation in the cost of informality generated by over 480,000 random worksite inspections in Mexico. For informal workers, inspections temporarily increase the probability of being formalized at the inspected firm, but separations also rise. For formal workers, we find temporary increases in the probability of remaining formally employed at the inspected firm and in monthly wages. At the firm level, increasing the cost of informal jobs leads to persistently lower formal employment.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/app.20200763
Increasing the cost of informal employment: Evidence from Mexico - American Economic Journal: Applied Economics - 16(1), Jan, 2024: p.377-411
We estimate the effect of increasing the cost of informal jobs on formal firms' and workers' outcomes. We combine administrative records and household surveys and exploit exogenous variation in the cost of informality generated by over 480,000 random worksite inspections in Mexico. For informal workers, inspections temporarily increase the probability of being formalized at the inspected firm, but separations also rise. For formal workers, we find temporary increases in the probability of remaining formally employed at the inspected firm and in monthly wages. At the firm level, increasing the cost of informal jobs leads to persistently lower formal employment.- Reproduced
https://www.aeaweb.org/articles?id=10.1257/app.20200763