IDEAS home Printed from https://ideas.repec.org/a/bla/devchg/v46y2015i5p1047-1079.html
   My bibliography  Save this article

Transitions to Formality and Declining Inequality: Argentina and Brazil in the 2000s

Author

Listed:
  • Roxana Maurizio

Abstract

type="main"> Although inequality and labour informality continue to be distinctive characteristics of Argentina and Brazil, during the last decade the two countries have been successful in reversing the negative trends of the 1990s. This article presents a comparative analysis of the labour formalization process that took place in Argentina and Brazil during the 2000s. It studies the flows towards labour formality, what caused them, and the interrelations of this process with the changes that occurred in labour institutions and the decline in income inequality. The study contributes to two debates: the role of labour market flexibilization in employment formalization, and the decline in income inequality. Most of the literature emphasizes the evolution of returns to education; this study complements this approach by analysing the contribution of formalization to the decline in inequality in Argentina and Brazil. The results show that labour formalization has reached all categories of workers, that it has been accompanied by real minimum wage increases, and that it has had an equalizing effect.

Suggested Citation

  • Roxana Maurizio, 2015. "Transitions to Formality and Declining Inequality: Argentina and Brazil in the 2000s," Development and Change, International Institute of Social Studies, vol. 46(5), pages 1047-1079, September.
    • Handle: RePEc:bla:devchg:v:46:y:2015:i:5:p:1047-1079
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1111/dech.12195
    Download Restriction: Access to full text is restricted to subscribers.
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2013. "A Helping Hand or the Long Arm of the Law?," World Bank Publications - Reports 22623, The World Bank Group.
    2. repec:ilo:ilowps:375000 is not listed on IDEAS
    3. Mariano Bosch & Julen Esteban-Pretel, 2009. "Cyclical Informality and Unemployment," CIRJE F-Series CIRJE-F-613, CIRJE, Faculty of Economics, University of Tokyo.
    4. Ronconi, Lucas & Colina, Jorge, 2011. "Simplificación del registro laboral en Argentina: Logros obtenidos y problemas pendientes," IDB Publications (Working Papers) 3799, Inter-American Development Bank.
    5. Bosch, Mariano & Maloney, William F., 2010. "Comparative analysis of labor market dynamics using Markov processes: An application to informality," Labour Economics, Elsevier, vol. 17(4), pages 621-631, August.
    6. Berg, Janine, 2010. "Laws or luck? Understanding rising formality in Brazil in the 2000s," MPRA Paper 43608, University Library of Munich, Germany.
    7. Saúl Keifman & Roxana Maurizio, 2012. "Changes in Labour Market Conditions and Policies: Their Impact on Wage Inequality During the Last Decade," WIDER Working Paper Series wp-2012-014, World Institute for Development Economic Research (UNU-WIDER).
    8. Monteiro, Joana C.M. & Assunção, Juliano J., 2012. "Coming out of the shadows? Estimating the impact of bureaucracy simplification and tax cut on formality in Brazilian microenterprises," Journal of Development Economics, Elsevier, vol. 99(1), pages 105-115.
    9. Lucas Ronconi, 2010. "Enforcement and Compliance with Labor Regulations in Argentina," ILR Review, Cornell University, ILR School, vol. 63(4), pages 719-736, July.
    10. Mansueto Almeida, 2008. "Além da Informalidade: Entendendo como os Fiscais e Agentes de Desenvolvimento Promovem a Formalização o Crescimento de Pequenas e Médias Empresas," Discussion Papers 1353, Instituto de Pesquisa Econômica Aplicada - IPEA.
    11. Keifman, Saúl & Maurizio, Roxana, 2012. "Changes in Labour Market Conditions and Policies: Their Impact on Wage Inequality During the Last Decade," WIDER Working Paper Series 014, World Institute for Development Economic Research (UNU-WIDER).
    12. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2009. "Unconditional Quantile Regressions," Econometrica, Econometric Society, vol. 77(3), pages 953-973, May.
    13. Gustavo Henrique de Andrade & Miriam Bruhn & David McKenzie, 2016. "A Helping Hand or the Long Arm of the Law? Experimental Evidence on What Governments Can Do to Formalize Firms," The World Bank Economic Review, World Bank, vol. 30(1), pages 24-54.
    14. Giovanni Andrea Cornia, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," WIDER Working Paper Series wp-2012-009, World Institute for Development Economic Research (UNU-WIDER).
    15. repec:unu:wpaper:wp2012-14 is not listed on IDEAS
    16. Maurizio, Roxana, 2014. "El impacto distributivo del salario mínimo en la Argentina, el Brasil, Chile y el Uruguay," Políticas Sociales 37208, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    17. Berg, Janine, 2010. "Laws or luck? Understanding rising formality in Brazil in the 2000s," MPRA Paper 43608, University Library of Munich, Germany.
    18. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    19. Ashenfelter, Orley & Smith, Robert S, 1979. "Compliance with the Minimum Wage Law," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 333-350, April.
    20. Madalozzo, Regina & Bortoluzzo, Adriana Bruscato, 2011. "The Impact of Tax Exemptions on Labor Registration: The Case of Brazilian Domestic Workers," Insper Working Papers wpe_232, Insper Working Paper, Insper Instituto de Ensino e Pesquisa.
    21. Fajnzylber, Pablo & Maloney, William F. & Montes-Rojas, Gabriel V., 2009. "Does Formality Improve Micro-Firm Performance? Quasi-Experimental Evidence from the Brazilian SIMPLES Program," IZA Discussion Papers 4531, Institute of Labor Economics (IZA).
    22. repec:unu:wpaper:wp2012-09 is not listed on IDEAS
    23. David KUCERA & Leanne RONCOLATO, 2008. "Informal employment: Two contested policy issues," International Labour Review, International Labour Organization, vol. 147(4), pages 321-348, December.
    24. Leonardo Gasparini & Nora Lustig, 2011. "The Rise and Fall of Income Inequality in Latin America," Working Papers 1110, Tulane University, Department of Economics.
    25. Bertranou, Fabio & Casanova, Luis & Sarabia, Marianela, 2013. "How, Why and in What Sectors Employment Informality Decreased in Argentina from 2003 to 2012," MPRA Paper 47467, University Library of Munich, Germany.
    26. Giovanni Andrea Cornia, 2012. "Inequality Trends and their Determinants: Latin America over 1990-2010," Working Papers - Economics wp2012_02.rdf, Universita' degli Studi di Firenze, Dipartimento di Scienze per l'Economia e l'Impresa.
    27. Guilherme Delgado & Ana Carolina Querino & André Campos & Fábio Vaz & Leonardo Rangel & Matheus Stivali, 2007. "Avaliação do Simples: Implicações à Formalização Previdenciária," Discussion Papers 1277, Instituto de Pesquisa Econômica Aplicada - IPEA.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Roxana Maurizio & Ana Paula Monsalvo, 2021. "Changes in occupations and their task content: Implications for employment and inequality in Argentina, 2003-19," WIDER Working Paper Series wp-2021-15, World Institute for Development Economic Research (UNU-WIDER).
    2. Manuel Fernández & Gabriela Serrano, 2022. "New Perspectives on Inequality in Latin America," Documentos CEDE 20295, Universidad de los Andes, Facultad de Economía, CEDE.
    3. Roxana Maurizio & Ana Paula Monsalvo & María Sol Catania & Silvana Martinez, 2023. "Short-term labour transitions and informality during the COVID-19 pandemic in Latin America," Journal for Labour Market Research, Springer;Institute for Employment Research/ Institut für Arbeitsmarkt- und Berufsforschung (IAB), vol. 57(1), pages 1-21, December.
    4. Facundo Quiroga‐Martínez & Esteban Fernández‐Vázquez, 2021. "Education as a key to reduce spatial inequalities and informality in Argentinean regional labour markets," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(1), pages 177-189, February.
    5. Lourenco Paz, 2022. "Does age modulate the impact of import competition on job type?," Economics and Business Letters, Oviedo University Press, vol. 11(4), pages 161-171.
    6. Luis Beccaria & Roxana Maurizio & Martin Trombetta & Gustavo Vázquez, 2016. "Una evaluación del efecto scarring en Argentina," Revista Desarrollo y Sociedad, Universidad de los Andes,Facultad de Economía, CEDE, vol. 77, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Roxana Maurizio & Luis Beccaria & Ana Monsalvo, 2022. "Labour Formalization and Inequality: The Distributive Impact of Labour Formalization in Latin America since 2000," Development and Change, International Institute of Social Studies, vol. 53(1), pages 117-165, January.
    2. repec:ilo:ilowps:485515 is not listed on IDEAS
    3. Maurizio, Roxana., 2014. "Labour formalization and declining inequality in Argentina and Brazil in the 2000s a dynamic approach," ILO Working Papers 994855153402676, International Labour Organization.
    4. Luis, Beccaria & Roxana, Maurizio & Vazquez, Gustavo, 2014. "Recent changes in wage inequality in Argentina. The role of labor formalization and other factors," MPRA Paper 56701, University Library of Munich, Germany.
    5. Roxana Maurizio & Ana Paula Monsalvo, 2021. "Informality, labour transitions, and the livelihoods of workers in Latin America," WIDER Working Paper Series wp-2021-19, World Institute for Development Economic Research (UNU-WIDER).
    6. Jessen, Jonas & Kluve, Jochen, 2021. "The effectiveness of interventions to reduce informality in low- and middle-income countries," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 138.
    7. Malena Arcidiácono, 2015. "Salario Mínimo y Distribución salarial: Evidencia para Argentina 2003 – 2013," CEDLAS, Working Papers 0192, CEDLAS, Universidad Nacional de La Plata.
    8. John Ariza & Gabriel Montes-Rojas, 2019. "Decomposition methods for analyzing inequality changes in Latin America 2002–2014," Empirical Economics, Springer, vol. 57(6), pages 2043-2078, December.
    9. Abramo, Laís, 2022. "Policies to address the challenges of existing and new forms of informality in Latin America," Políticas Sociales 47774, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL).
    10. Seguino, Stephanie & Braunstein, Elissa, 2012. "The impact of economic policy and structural change on gender employment inequality in Latin America, 1990-2010," MPRA Paper 43261, University Library of Munich, Germany.
    11. Fernández, Manuel & Messina, Julián, 2018. "Skill premium, labor supply, and changes in the structure of wages in Latin America," Journal of Development Economics, Elsevier, vol. 135(C), pages 555-573.
    12. Gabriel Ulyssea, 2018. "Firms, Informality, and Development: Theory and Evidence from Brazil," American Economic Review, American Economic Association, vol. 108(8), pages 2015-2047, August.
    13. Caio Piza & Tulio Antonio Cravo & Linnet Taylor & Lauro Gonzalez & Isabel Musse & Isabela Furtado & Ana C. Sierra & Samer Abdelnour, 2016. "The Impact of Business Support Services for Small and Medium Enterprises on Firm Performance in Low‐ and Middle‐Income Countries: A Systematic Review," Campbell Systematic Reviews, John Wiley & Sons, vol. 12(1), pages 1-167.
    14. Rahman, Aminur, 2014. "Investment climate reforms and job creation in developing countries : what do we know and what should we do ?," Policy Research Working Paper Series 7025, The World Bank.
    15. Gustavo Canavire-Bacarreza & Luis C. Carvajal-Osorio, 2020. "Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes," Journal of Labor Research, Springer, vol. 41(1), pages 128-168, June.
    16. Rocha, Rudi & Ulyssea, Gabriel & Rachter, Laísa, 2018. "Do lower taxes reduce informality? Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 134(C), pages 28-49.
    17. Mariana Viollaz, 2019. "Multiple Violations of Labor Market Regulations: Patterns in the Peruvian Labor Market and the Impact of Enforcement," CEDLAS, Working Papers 0244, CEDLAS, Universidad Nacional de La Plata.
    18. Andrés Ham, 2015. "Minimum wage violations in Honduras," IZA Journal of Labor & Development, Springer;Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 4(1), pages 1-19, December.
    19. Melanie Khamis, 2014. "Formalization of jobs and firms in emerging market economies through registration reform," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-67, May.
    20. Rita Almeida & Pedro Carneiro, 2012. "Enforcement of Labor Regulation and Informality," American Economic Journal: Applied Economics, American Economic Association, vol. 4(3), pages 64-89, July.
    21. Mansoor, Kashif & O'Neill, Donal, 2020. "Minimum Wage Compliance and Household Welfare: An Analysis of over 1500 Minimum Wages," IZA Discussion Papers 13298, Institute of Labor Economics (IZA).

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:devchg:v:46:y:2015:i:5:p:1047-1079. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0012-155X .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.