Informal wages in an economy with active labor courts

AUTOR(ES)
DATA DE PUBLICAÇÃO

04/08/2011

RESUMO

In most developing countries, job regulations and the justice branch interfere on sev- eral aspects of labor contracts. Inspired by this fact, we build a model that explores the role of labor courts in the determination of the di¤erence between formal and informal wages. We show that the presence of active labor courts in an environment where labor relations are subject to asymmetries of information reproduces features documented by the empirical literature. The main implications of our model are tested using Brazilian data.

ASSUNTO(S)

wage gap informal labor markets labor courts setor informal (economia) justiça do trabalho

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