Labor rights, formality and spillovers: evidence from Brazil

• Ano de defesa: 2016
• Autor(a) principal: Pires, Pedro Oliveira Monteiro
• Orientador(a): Soares, Rodrigo Reis
• Tipo de documento: Dissertação
• Tipo de acesso: Acesso aberto
• Idioma: eng
• Palavras-chave em Português: Legislação trabalhista; Formalização; Diferença-em-diferenças
• Palavras-chave em Inglês: Spillover; Labor legislation; Formality; Difference-in-differences
• Link de acesso: http://hdl.handle.net/10438/16550

We analyze the effects of constitutional amendment 72/13 in Brazil, which matched labor rights of domestic workers to those of other employees. We show that, after the legislation, a sizable media coverage and an intensified public interest increased general knowledge of domestic workers' labor rights. As a consequence, non-compliance of labor legislation in the domestic services sector became more difficult. At the same time, the amendment's need for additional regulation caused labor costs to remain mostly unchanged. Using a difference-in-differences approach that compares selected occupations over time, we find that the amendment -- and the discussion it sparked -- caused an increase in formality and wages among domestic workers. Then, using the heterogeneity of the amendment's impact on demographic groups, our results show that domestic employment was reduced and low-skilled women were pushed out of the labor force and into lower quality jobs. Placebo tests and robustness analysis indicate that our results cannot be explained by a number of alternative interpretations.