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100 _aParra, Brenda Samaniego de la and Bujanda, León Fernández
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245 _aIncreasing the cost of informal employment: Evidence from Mexico
260 _aAmerican Economic Journal: Applied Economics
300 _a16(1), Jan, 2024: p.377-411
520 _aWe 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
773 _aAmerican Economic Journal: Applied Economics
906 _aEMPLOYMENT
942 _cAR