(PDF) ENFORCEMENT OF LABOR REGULATIONS AND JOB FLOWS: EVIDENCE FROM BRAZILIAN CITIEs

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ENFORCEMENT OF LABOR REGULATIONS AND JOB FLOWS: EVIDENCE FROM BRAZILIAN CITIEs
Pedro Carneiro
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Abstract
The frequency of labor inspections in Brazil increased in the late 90s. In the years that followed (namely, from 2003 to 2007) formal employment in Brazil expanded significantly. This paper examines whether city level changes in in labor inspections (starting from the late 90s) are correlated with city level changes in the number of formal labor contracts, telling us to what extent labor inspections may have led to the rise in formal contracts in Brazil. We explore administrative data on formal employment at the city level on several job and worker flow indicators (job creation, destruction, reallocation, accessions, and separations), between 1996 and 2006, and unique data on the intensity of labor inspections. The results suggest that increases in labor market inspections are correlated with increases in gross and net job creation rates, and accession rates. In contrast, changes in the rate of job destruction are not significantly correlated with changes in the frequency of labor i...
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ENFORCEMENT OF LABOR REGULATIONS AND JOB FLOWS:
EVIDENCE FROM BRAZILIAN CITIES

ANA ABRAS (USP), RITA ALMEIDA (WORLD BANK), PEDRO CARNEIRO (UCL AND IFS), AND
CARLOS HENRIQUE L. CORSEUIL (IPEA)*1

THIS VERSION: MARCH 24TH, 2015

The frequency of labor inspections in Brazil increased in the late 90s. In the years that followed (namely, from
2003 to 2007) formal employment in Brazil expanded significantly. This paper examines whether city level changes
in in labor inspections (starting from the late 90s) are is correlated with city level changes in the number of formal
labor contracts, telling us to what extent labor inspections may have led to the rise in formal contracts in Brazil. We
explore administrative data on formal employment at the city level on several job and worker flow indicators (job
creation, destruction, reallocation, accessions, and separations), between 1996 and 2006, and unique data on the
intensity of labor inspections. The results suggest that increases in labor market inspections are correlated with
increases in gross and net job creation rates, and accession rates. In contrast, changes in the rate of job destruction
are not significantly correlated with changes in the frequency of labor inspections. This finding is robust to different
specifications and is consistent with a model where formal jobs become more attractive to workers when
enforcement increases.

Keywords: Formal employment growth; Job flows; Enforcement labor market
regulations; Panel data.

JEL codes: J21, J63

We gratefully acknowledge the suggestions of seminar participants at IPEA (2012), the 2011 meeting of the
Brazilian Economic Association, and the conference Reforming Minimum Wage and Labor Regulation Policy in
Developing and Transition Economies held at the Beijing Normal University (2014). Corresponding author: Carlos
Henrique Corseuil Av. Presidente Antonio Carlos 51, Rio de Janeiro, Brazil. Email:
[email protected]
We are very grateful for the Ministerio Trabalho e Emprego for sharing the data on labor inspections for several
years.

1. Introduction

One of the most notable facts about the Brazilian labor market has been a recent growth in
formal employment, mainly concentrated between 2004 and 2013. For example, between 1995
and 1999, formal employment grew, on average, by 358,000 job vacancies per year. In contrast,
between 1999 and 2003, 1.13 million job vacancies were created per year. Furthermore, between
2003 and 2007, 2 million formal jobs were created per year (see Corseuil, Mora, and Ramos,
2011).
This net job creation has been accompanied by an overall growth in dynamic job flows.
Between 1996 and 2006 alone, job creation and job destruction rates have also increased,
reaching a peak in net job growth and job reallocation rates of formal jobs of 7 and 31 percent,
respectively.
Several factors are likely to have contributed to this pattern. Two examples are the dynamics of
technology and market forces, or changes in different types of regulations. To be concrete, the
expansion of business credit (Catão, Pages, and Rosales 2009), the improved economic cycle
(Corseuil and Foguel 2012), and tax simplification programs for small businesses (Fanzylber et
al 2011) could all have affected.
In addition, between 1996 and 2001, labor inspections in Brazil have also undergone important
changes becoming generally more frequent and effective. This can be inferred from the measured
increase in either the number of labor inspections per plant, or by the number of informal
workers regularized following each inspection. Part of this change may be explained by the
increased use of performance incentives for labor inspectors, which may have led them to work
more effectively. It could also be linked to the a rise in the amount of public resources (human
and financial) devoted to the resolution of labor related irregularities. A critical policy question is
therefore whether this increase in labor inspections between 1996 and 2001 could have caused
the increased net job creation in the subsequent period.
In spite of the importance of the topic, the literature has not been conclusive about the relation
between enforcement of labor regulations and job flow rates both for developed or the
developing world. The question remains an empirical one. This paper investigates this important
issue, for the years between the late 1990s and early 2000s, exploring administrative data at the
city level on job and worker flows on the one hand, and administrative information on the
enforcement of labor market regulations across cities, on the other hand. We measure
enforcement using the frequency of labor inspections at the city level.
Relating labor regulations with aggregate indicators of job growth or job flows would,
however, likely not yield a good estimate of the impact of enforcing labor regulation on job
flows. The main empirical challenge would arise from the fact that enforcement of labor
regulations is likely not randomly distributed across cities. On one end, enforcement may be
stronger in cities where reports of labor violations are more frequent. On the other end,
enforcement may be stronger in cities with better institutions.
To mitigate this problem our reduced form will explore time and within country variation
(across cities) in the enforcement of regulations. Exploring this variation also allows us to

account for other transformations occurring at the national level in the that could have
simultaneously contributed to the increase in formality. In addition our data includes time
varying information on city level GDP, the distribution of plant size, and the share of educated
workers at plant level, total city population, and total city homicide rates. In addition because we
explore city level panel data we can account also for unobservable city-year characteristics.
Our results suggest that, all else constant, cities facing an increase in the enforcement of labor
market regulations, tend to have higher job creation rates. In contrast, changes in job destruction
rates as measured in our administrative data set are not related with changes in the degree of
enforcement of labor regulations. Our main findings are robust to the inclusion of state level time
trends, and considering different sub national samples.
Our paper relates and contributes to different literatures. First, it relates to the literature
analyzing, at an aggregate level, indicators of job growth/flows with differences in regulations
and institutions. While earlier empirical cross country work did not find a significant link
between labor regulations and labor reallocation (see Bertola and Rogerson, 1997; Davis and
Haltiwanger, 1999), more recent findings show that, even after accounting for technology and
market affects, there is still sizeable unaccounted variation in job reallocation across countries
that remains unexplained. This variation can be due either to institutional and policy variables or
to measurement error issues inherent to cross country studies (see Bartelsman, Haltiwanger and
Scarpetta, 2009). The literature looking at the institutional role in explaining this cross country
variation in job reallocation shows that regulations may play an important role.
Difference-in-difference estimations exploring cross country variation in the firing and hiring
costs, show a strong and negative relationship between restrictive regulation and the reallocation
of resources (e.g., Micco and Pages, 2004; Haltiwanger et al 2010). Because our work explores
within county variation in the degree of enforcement of labor regulations, our empirical approach
bypasses some of the measurement issues and assumptions in previous research by using time
and within country variation in de facto regulation within a same country. As the enforcement of
policies is not uniform across regions in Brazil, we discuss a tighter link between the degree of
stringency of the de facto labor market regulation and job reallocation in cities under a similar
institutional environment.
Second, it relates to the literature studying the impact of labor regulations on firm
dynamics and labor market outcomes. The literature here is extensive and considers several
dimensions of labor market regulations, from the compliance with mandated benefits or the
minimum wage to alternative employment protection measures. The theoretical predictions on
how these regulations actually affect firm outcomes are diverse. While the literature on the
effects of mandated benefits on labor market outcomes in developing countries has produced
mixed results2, the impacts of employment protection rules likely vary for different workers and

The literature on the effects of mandated benefits on labor market outcomes in developing countries has
produced mixed results. The question of whether benefits impact employment and wages remains only partially
answered, since different authors have found both increases and reductions in employment and wages after relevant
labor market reforms. Take the case of two studies on social security in Latin American which showed opposite
answers. Gruber (1997) analyses the social security reforms in Chile in the eighties which sharply reduced payroll

firms.3 Because our empirical approach will explore variation in labor inspections, we are
effectively considering the de facto enforcement of a diverse mix of labor policies. This has
advantages and disadvantages relatively to comparing the variation in de jure regulations. While
on the one hand, one cannot try to identify the effect of each regulation, on the other hand, any
effect identified already considers the interactions of de facto regulations and of their
enforcement which is ultimately what affects agents and impacts in the economy.
We also relate with an increasing literature for Brazil analyzing how changes in the
enforcement of labor market regulations impacts labor market outcomes. This work was initiated
by Almeida and Carneiro (2009) and proxied enforcement of labor regulations with the average
labor inspections in the city. 4 Almeida and Carneiro (2012) look at the impacts of enforcement
of labor regulations on different labor market variables, also exploring administrative city level
data on labor inspections. Exploring only the within country variation across cities they show
that, in response to a rise in labor inspections there is an increase in formal employment, a
decrease in informal employment, a rise in non-employment, a decline in wages at the top of the
formal wage distribution, and an increase in informal wages. All of the movement from the
informal to the formal sector is among the self-employed. There is little change in the
employment and wages of those who are informal employees. Almeida and Carneiro (2012)
argue that, in the early 1990s, labor inspectors started enforcing compliance with mandated
benefits, namely contributions in advance to the job severance fund, and job severance payments
upon dismissal. As a result of increased enforcement, formal workers support more generous
mandated benefits by receiving lower wages. The value that workers place on these benefits is
potentially higher than their cost to employers because they are untaxed. In addition, wage
rigidity (e.g., through minimum wages) may prevent downward adjustment at the bottom of the
wage distribution. This causes formal sector jobs at the bottom of the wage distribution, to

taxes. The results point to wage shifting following lower taxes and little employment effects, regardless of the
choice of estimation technique. Closer to our work, Kluger and Kluger (2002) use a panel of manufacturing firms in
Colombia to assess wage and employment outcomes after a government attempt to improve Social Security funding
with higher payroll taxes. Using variation in tax rates and compliance between firms and industries, the authors find
that the adjustment happened largely through disemployment instead of wages.
Employment protection rules may vary for different types of workers and firms, hence their potential to generate
misallocation and change the optimal choice of labor input and firm size. One example can be found in Kluger and
Pica (2005) study of the impact of an increase in employment protection costs for small firms in Italy. Difference-in-
difference exercises for a regulation change in 1990 indicate that higher firing costs lowered turnover rates of small
firms. Small businesses were also less likely to enter the market after the reform. Employment protection can also
affect the pace of worker flows. In the case of Chile, Montenegro and Pages (2003) estimate the effect of severance
payment in job loss and job finding rates of different workers. Employees with shorter tenure bring lower dismissal
costs. This is the case of young and female workers who display higher chances of dismissal over the cycle and
higher job finding rates.
Almeida and Carneiro (2009) explore firm-level data from the Brazil World Bank's Enterprise surveys to relate a
more stringent enforcement of labor market regulations with the number of hires and fires among formal firms. The
results suggest that, on average, firms facing an increased probability of being inspected (by 1 percentage point)
employ 0.38% less workers than similar firms. They suggest that more intensive inspection inhibit the use of
informal hires and impose a cost on firms decreasing the level of new formal hires. It is worth stressing, however,
that their data they also cannot identify whether workers have a formalized work contract. It is possible that the
registration of a worker who has already been employed, albeit informally, may not be accounted for as a hire. This
may lead to an underestimation of the impacts of labor inspections on total employment.

become more attractive to informal workers, leading them to switch to the formal sector. In the
process, wages in the informal sector adjust upwards.
Our work builds and contributes to this literature by exploring within country and time series
variation in the enforcement of labor market regulations between 1996 and 2006 and focusing
now on job and worker flows, including indicators of job creation, job destruction, reallocation,
accessions and separations. In addition, our results fully corroborate Almeida and Carneiro
(2012) findings on how labor inspections are related to employment in the formal sector. There
are different ways that labor inspections can affect job and worker flows, and the direction of the
relationship is not clear a priori. On the one hand, inspections can directly impact job creation
though the regularization of informal jobs at the plant level. Indirectly, with higher compliance
formal sector jobs can become more attractive to workers, lowering job destruction and
separations. On the other hand, more inspections increase the cost of formal jobs and can lead
establishments to shed workers. Almeida and Carneiro (2012) show that in cities with more
frequent inspections formal employment tends to be higher. This finding is fully consistent with
our results of higher formal net employment growth and job creation rates in cities with more
frequent inspections.
One fact is worth highlighting though. Unlike, Almeida and Carneiro (2012) who explore the
population census, our paper explores administrative data only on formally registered firms. It
thus only captures the formal labor contracts and one cannot make any inferences about the
relationship between inspections and the subsequent regularization of labor contracts as we do
not observe informality.
This paper is organized as follows. Section 2 presents an overview of the main changes in the
procedures of labor inspection implemented in Brazil, arguing that changes in these policies have
made them more effective. Section 3 discusses the data used and indicators computed. Section 4
presents the empirical methodology and the proposed reduced form. Section 5 reports the main
descriptive statistics for the final sample and section 6 discusses the empirical results. Section 7
discusses conclusions and main policy implications.

2. Labor Inspections in Brazil

Starting in 1995 the Ministry of Labor and Employment (MTE), under the Secretary of
Work Inspection (SIT) implemented a series of reforms aiming to increase the efficiency of
inspections.5 The reform emphasized a new way of monitoring outcomes of labor inspections
(see Miguel, 2004). The primary objective was the standardization of the results of labor
inspections at the national level. The creation of the Federal System of Labor Inspection (SFIT)
was an important tool for this aim. First, the system allowed the creation of a routine to plan
labor inspections throughout the country. Schedules with the targeted outcomes (goals) began to

The government's concern with reducing the fiscal deficit at this time is pointed as a strong motivation to pursue
an increase in the efficacy of labor inspection. One of the items commonly inspected are the deposits in the FGTS.
Cardoso and Lage (2005), for example, encourage the reader to make this association.

be sent annually by various Regional Offices of Labor to create a system of inspections. This
reform made policies less reactive to complaints about labor standards and more proactive and
based on long-term planning. In addition, the reform developed financial incentives so that labor
inspections played became more efficient. In particular, the system awarded bonuses linked to
performance. The bonuses were granted in accordance with the enforcement goals initially
established. These goals generally considered the number of inspected plants and the total
financial amount collected from fines. It is worth noting that the bonus system is not the only
incentive mechanism. Pires (2011) argues that the formation of regional and sector teams with
common goals is an additional incentive mechanism to individual bonuses.6
The reform also involved the change in the motivation of labor inspections. Miguel
(2004) states that “the main objective was to make inspection less punitive and more educational,
thus making it more effective from a social-economic point of view”. In this context, it is
important to highlight two actions: i) the creation in 1996 of handbook entitled "Mediator's
Manual" which contained advice to resolve labor conflicts, and ii) the increase of available
options for the labor inspector, beginning in 2001, when "tables of understanding" were
permitted to debate solutions over difficult-to-solve irregularities during audit visits. Pires (2008)
suggests that this new approach contributed to enabling the labor inspector to fulfill his role in a
more efficient manner. Almeida (2008) also explores this point, arguing that this type of strategy
is particularly successful in non-metropolitan areas cities that agglomerate small businesses.7
Therefore, since 1995, the inspector became: i) more oriented on the focus of its actions,
ii) received more incentives to work more intensively perusing evasion (with pay for
performance schemes), and iii) had more resources to support any irregularities found. We argue
that these changes in labor inspections in Brazil were accompanied by an improvement in the
inspections related indicators. Table 1 illustrates this point.

Table 1 Country Means for Labor Inspection Variables, 1996-2000 & 2001-2006
Panel A Labor Inspection Outcomes
Rate of Number of
formalization Inspected Size of Plants with
Fines per
Year following Plants by inspected Labor Fines
plant
inspections labor plants (%)
(%) inspector
(1) (2) (3) (4) (5)
Av. 1996-
2000 1.8 141.4 50 18.3 1.6
Av. 2001-
2006 2.6 118.0 74 18.9 1.7
Source: Authors calculations using RAIS, Ipeadata and Ministry of Labor-SFIT administrative data on
inspections (1996-2006). Sample size includes 5654 cities and 32553 obs across the two periods 1996-

The author also suggests that a collective mechanism can be more effective than a bonus mechanism.
The author also points to the relevance of an integrated performance of the inspection with other public agents, such as SEBRAI, state
secretaries, and the public state ministry. This appears to bring synergies by virtue of the fact that such agents have similar objectives with
respect to combating informality, understood in a broader sense.

2000 and 2001-2006.

Note: Panel A: In column (1) rate of formalization following inspections implies that on average 1.8 of
the employees being formalized after inspection. In column (2) the number of inspected plants by
inspector in the period. In column (3) the number of employees in inspected plants. In column (4) the
percent of plants that received a fine. In column (5) the number of times a plant was fined.

Table 2 - Inspection Intensity by
year

Inspection
Year
Frequency

1996 0.4
1998 0.3
2000 0.3
2002 0.2
2004 0.2
2006 0.7
Source: Authors calculations using RAIS
and SFIT 1996-2006. Note: Inspection
Frequency is measured at the city-level by
the number of visits divided by the number
of establishments.

In column (1) of table 1 displays the annual growth in the rate of formalization of workers
following inspections which is captured by the number of workers registered during labor
inspections divided by the number of workers covered by these same inspections. This ratio
increases from 1.8% in 1996-2000 to 2.6% in 2001-2006. Column (2) shows that in these two
periods the annual average number of plants inspected by each inspector decreased from over
141 to less than 120. Therefore an increase in the rate of formalization seems to have been
motivated by better and more targeted inspections rather than by more inspections.
This hypothesis is indirectly supported in the third column, which shows that the mean
size (captured by total number of employees) of the inspected plant increased by almost 50%,
changing from 50 to 74.8 If we consider that informal labor contracts are less frequent in larger
plants, then an increase in the mean size of inspected plants may be related to a decrease in the
rate of labor contracts that become registered as a consequence of the inspections. Nevertheless,
the first column of table 1 indicates an increase in the rate of contracts registered following the
labor inspections. These facts are reconciled if, throughput this period, there is an increase in the
effectiveness of inspections.
Finally, the last column of Table 1 shows that the percentage of inspected plants which
have been fined remained stable around 18%. This suggests that the highest rate of formalization

Cardoso and Lage (2005) report that labor inspections started to focus on large firms, attributing this behavior to
the incentives given to inspectors, who would rather visit larger firms.

was not the result of applying harsher penalties.9 That is an indication that the improvement of
labor inspection, with respect to combating informality, is due to a more effective performance
on the part of the labor inspector.10 Table 2 shows the inspection intensity measured at the city-
level and used in the regression analysis: number of visits over the number of plants. This
indicator increased from 1996 to 2006, but dips in 2002.
Note that this increased effectiveness of labor inspections could have come from any
combination of the three dimensions outlined above. On the one hand, the planning of
inspections may have increased the focus of the inspectors' visits, bringing them to plants with
more labor irregularities. On the other hand, the incentives could have had the effect of
preventing inspectors from revealing any problems encountered during the inspections whenever
they appeared too difficult to solve. The data suggests an important role for the
informative/conciliatory approach once the number of registered workers increased - without
this, the number of assessments would have increased. Identifying the specific contributions of
each of these dimensions is beyond the scope of this work.
Another change in labor inspection in Brazil occurred outside the SIT. Since 1998, the
Public Ministry of Work (MPT) began to play an active role in labor inspection, increasingly
acting in parallel to the SIT. The most noteworthy fact is that in the last decade five priorities
were chosen for the SIT, one of them being the regularization of labor contracts. One should also
take the performance of the MPT into account in the analysis. However, because we lack
information about MPT's results, we will focus the analysis on labor inspection under the SIT.

3. Data and Indicators

In the empirical work we will explore different data sets covering the period between 1996 and
2006. First, we explore the report on social information RAIS (Relação Anual de Informações
Sociais, RAIS), published yearly by the Brazilian Ministry of Labor and Employment, and
capturing all the sectors of the economy (agriculture, industry and services).11 This is our source
of information to compute measures of job and worker flows. We consider the total number of
accessions (Ai,t ) and separations (Si,t ) each year (denoted with subscript “t”) in every formal
plant12 (those registered with the tax authority and denoted with subscript “i”). We compute net
employment growth in each establishment (Δni,t ) which are the basic inputs for job flow
measures.

It is often argued that labor fines may have their efficacy diminished in Brazil given the limited reach of Labor
Courts in the country. See Magalhães (2010).
10
SFIT data show that the improvement in the performance of labor inspections is not limited to the
regularization of workers. E.g., the percentage of irregularities solved out of total irregularities found during
inspections rose 71,1% from 1996 to 2000 and 84,5% from 2001 to 2006.
11
This data is adequate for our analysis as it includes establishments/plants of all sizes as long as they are formally registered. This contrasts
with some firm level data for selected developing countries which only capture firms employing more than a threshold level.
12
In the text, we use interchangeably the terms plant and establishment, since they both refer to the unit of observation available in the data.

We also compute job and worker flow measures aggregated at the city level between 1996 and
2006. Job creation and destruction rates at the city level (denoted by subscript “j”) are defined as
in Davis, Haltiwanger and Schur (1996):

JCj,t = 100*[∑iϵj(Δni,t).I(Δni,t > 0)/Nj,t], (1)

JDj,t = 100*[∑iϵj│Δni,t│.I(Δni,t ≤ 0) /Nj,t], (2)

JCj,t and JDj,t denote the rate of job creation and destruction for year t and city j, respectively.
The two job flow rates are based on the change in employment resulting from the contrast of
accessions and separations (Δni,t) at the plant level i, in each city j from years t-1 and t. When
this variation is positive, it will contribute to job creation in the city, and when it is negative it
contributes to job destruction in the city. This condition appears in the above formulas through
the indicator function I(.). Nj denotes the city average employment in twelve consecutive months
during year t and it is used for normalization of both rates.
Two job flow variables derived from job creation and destruction rates are also
considered in the analysis: net job growth rate and job reallocation rate. These measures allow us
to look at distinct aspects of labor market, namely the net increase in job positions and the
increase in job churning. It is possible that the policy studied has no effect in employment
growth at city level but increases job reallocation within cities through job creation and job
destruction at distinct plants within the same city simultaneously. For instance jobs may flow
from plants with higher inspection probability to plants with lower probability of being
inspected.
NETj,t = JCj,t -JDj,t (3)
REALLj,t = JCj,t + JDj,t (4)

Finally, we also aggregate accessions and separations at city level computing:

Aj,t = 100*∑iϵj(Ai,t) /Nj,t (5)
Sj,t = 100*∑iϵj(Si,t) /Nj,t (6)

where Ai,t and Si,t are accessions and separations of workers at the plant level, as previously
defined.13 The average employment in the twelve consecutive months during year t is used for
normalizing both rates.
Second, we explore annual information on labor inspections at the city level. This is
collected by the Brazilian Federal System of Labor Inspection (SFIT) which is part of the
Ministry of Labor. The data is available at the city level for the years 1996, 1998, 2000, 2002,
2004, and 2006. Our period for the analysis coincides with these years since this is the most

13
Accessions are the sum of hires (H), rehires (RH), and transfers from other establishments in the same firm. Separations are sum of quits
(Q), fires (F), discharges (D) and transfers (TO) to other establishments in the firm.

restrictive set of data in the time dimension. We measure labor inspections in the city j with an
indicator of the average frequency of total labor inspections per plant in the city, where the
number of plants in each city is the computed using RAIS:

FRj,t = LIj,t/∑i(I(iϵj), (7)
where LIj,t is the total amount of visits by labor inspectors in city j during year t and I(iϵj) is the
same indicator function used before.
Third, we use additional variables to control for differences across cities/years such as
yearly and city level GDP, current city government expenses as a fraction of GDP, agricultural
sector GDP, service sector GDP, population, and the number of homicides. GDP related
information were taken from IPEADATA, while population and homicides information are
available at DataSUS.14

4. Empirical Methodology

We explore a simple reduced form equation relating the different measures of job flow
and job reallocation with measures of enforcement of labor regulations as captured by
inspections. As described in the previous section, we consider different different dependent
variables of interest: total job creation and destruction rates (JC and JD), net job growth (NET,
equal to JC minus JD), reallocation rate (REALL, equal to JC plus JD), accession rate (A), and
separation rate (S). The reduced form model is given by:

Yjt = FRjt + Xjt + µ t + αj + εjt (8)

where Yjt denotes the value of the dependent variable of interest, in city j, and year t, and where
t=1996, 1998, 2000, 2002, 2004, and 2006; FRjt captures the frequency of labor inspections in
city j at year t; Xjt captures time varying city level characteristics such as the average, median
and 75th percentile of plant size in the city, city level GDP, share establishments in agriculture,
share of establishments in industry, average, median and 75th percentile of share of workers with
secondary education in the establishment at the city-level, total city population, and total city
homicide rates. Including these time variant city level controls variables is important to account
for city characteristics that simultaneously affect job and worker flow measures and may be
related with the intensity of labor inspections at the city level. µt are year dummies to capture
macro shocks; αj are city dummies capture unobserved time invariant city level characteristics;
and ε captures unobservable shocks to our dependent variable of interest. We estimate equation
(8) using weighted ordinary least squares where the employment at city level is used as weight.

14
This information is available at www.ipeadata.gov.br, while population and homicides information are available at www.datasus.gov.br.

We will also test the robustness of the results by including in equation (8) state level time
trends, possibly correlated with city level trends in the enforcement of labor regulations and with
trends in job flow rates. Hence we will estimate the following specification:

Yjt = FRjt + Xjt + µ t +θst + αj + εjt (9)
where all the notation is as above and θst captures the state specific trends.

5. Descriptive Statistics

Tables 3 and 4 report the evolution of our main dependent variables of interest at the
aggregate level, between 1996 and 2006. Aggregation from city level to national level uses
average city-year employment level as weights analogous to the use of average plant
employment in (3). Table 3 shows that throughout this period, there are distinct trends in the
evolution of job creation and job destruction, where the trend points to an increase for job
creation and a decrease in job destruction. Column (1) shows that JC rises from 14.6% in 1996 to
17.9% in 2000, and then stabilizes around 17%. Column (2) suggests a noisier evolution for JD,
but with two distinct levels – a higher one in the 1990`s (around 10%) and a lower one in the
2000`s (around 8,5%). Columns 3 and 4 show that net growth increased substantially, while
reallocation rates stayed approximately constant. The contrast of evolutions across the columns
attests that each measure capture a distinct feature of the labor market, justifying then the
simultaneous use of them. The same can be said about using worker flow measures as a
complement for job flow measures. Table 4 presents the evolution of worker flows from 1996 to
2006. Column 1 has accession rates which have increased substantially, especially in the 2000`s,
when JC was relative stable. Separation rates, in column 2, display a U-shape varying from just
above 40% in the two extremities to 37.2% in 2000. Again this contrasts with the JD evolution
which was rather stable.

Table 3: Job Flows, 1996 - 2006
Job Job Net Job
Year Creation Destruction growth reallocation
Rate Rate Rate Rate
(1) (2) (3) (4)

1996 14.60 9.93 4.67 24.54
1998 15.67 10.08 5.59 25.74
2000 17.89 8.48 9.41 26.37
2002 16.75 8.90 7.84 25.65
2004 17.55 8.14 9.40 25.69
2006 17.12 8.48 8.64 25.59

16.60 9.00 7.59 25.60
1996-2006 Average
Source: Authors calculation based on RAIS (1996-2006).
Note: all statistics are based on a sample of 5654 cities in each year. Column (1) reports average job creation in
Brazil, column (2) reports job destruction, column (3) reports Net growth (job creation minus job destruction),
column (4) reports job reallocation (job creation plus job destruction). The statistic 14.6 for 1996 implies that job
creation rate in Brazil over the period analyzed was 14.6% of the average total employment. Summary statistics in
the last line report the average across all city-year cells. All values are weighted by year-employment size

Table 4: Worker Flows, 1996 - 2006
Accession Separation
Year
Rate Rate

(1) (2)

1996 45.09 40.42
1998 43.66 38.07
2000 46.62 37.21
2002 46.85 39.01
2004 48.69 39.29
2006 49.35 40.71

1996-2006 Average 46.71 39.12

Source: Authors calculation based on RAIS (1996-2006).

Note: all statistics are based on a sample of 5654 cities in each
year. Column (1) reports accession rate and column (2) reports
separation rate. Summary statistics in the last line report the
average across all city-year cells. All values are weighted by
year-employment size

In addition to the time series variation, our identification strategy will rely on the ariation
across cities. Table 5 shows that the overall cross section variation in the main variables is
substantial for the job and worker flows and for the inspection intensity. The ratio between the
90th and 10th percentiles in job creation reaches almost 2, and passes this mark in job
destruction. The analogous ratio for both worker flow measures are also higher than 2.
In order to identify our coefficient of interest there must have enough cross-section
variation for our labor inspection measure. Table 5 indicates that our data comprises such

variation as the range from the 10th and 90th percentiles goes from 0.05 to 0.70. Finally the last
two rows of the table indicates that our city level time varying controls also present substantial
cross-section variation. This makes us confident that they help to isolate at least part of
confounding effects that might jeopardize the interpretation of our estimates in a univariate
regression analysis.
The cross section variation in the main variables of our analysis may be driven by city
characteristics. As Almeida (2008) suggested, the logistics of inspection could vary significantly
by the size of the city and the size of its establishments.

Table 5 Statistics of Worker and Job Flows, Inspection Indicator, and Establishment Characteristics at
the city level
Median Percentile(90) Percentile(10) Coeff. Variation

Job Creation 15.32 22.86 11.83 0.77
Job Destruction
8.63 12.55 5.43 0.63
Net Growth
6.90 13.63 2.19 0.32
Job Reallocation
24.28 33.53 18.74 0.77
Accessions 42.32 64.99 31.25 0.74
Separation 37.09 54.85 24.26 0.65
Inspection frequency
0.22 0.70 0.05 0.24
Share of workers with secondary degree
0.34 0.50 0.19 0.69
Establishment size
15.65 22.29 7.39 0.36
Source: Authors calculations using RAIS and SFIT from 1996 to 2007.
'Note: Inspection Frequency is measured at the city-level by the number of visits divided by the number of
establishments. Job creation, job destruction, net growth, job reallocation, accessions and separations are defined
by equations 1 to 6 in the main text, respectively. Establishment size is defined as the number of employees
divided by the number of establishments. Establishment size and share of workers with secondary degree are
averaged across establishments in the city and aggregated at the national level using city-year employment
weights.

Table 6 and Table 7 show inspection intensity during 1996-2006 separating cities by their
average establishment size as well as by three groups according to the number of establishments:
cities with more than 1,000 establishments, cities with 100-1,000 establishments, and cities with
less than 100 establishments. Regarding Table 6, inspection intensity increases with plant size,
suggesting that inspectors may be targeting establishments with more than 20 employees.
Regarding Table 7, inspection intensity is the highest in large cities with more than 1000
establishments.

Table 6 Inspection Intensity by average plant size

Inspection
Establishment Size
Frequency
Establishment Size 1 to 4 employees 0.08

Establishment Size 5 to 9 employees 0.17
Establishment Size 10 to 19 employees 0.31
Establishment Size 20 to 49 employees 0.55
Establishment Size 50+ employees 0.34
Source: Authors calculations using RAIS and SFIT 1996-2006.
Note: Inspection Frequency is measured at the city-level by the
number of visits divided by the number of plants, establishment
size is defined as the number of employees divided by the number
of establishments.

Table 7 Labor Inspection Intensity by city size

Large Medium Small
(1) (2) (3)
Inspection Frequency 0.36 0.19 0.19
Source: Authors calculations using RAIS and SFIT from 1996 to 2007. Ipeadata
GDP and Population series.
Note: Inspection Frequency is measured at the city-level by the number of visits
divided by the number of establishments. Large, medium and small cities have more
than 1,000 establishments, between 100-1,000 establishments, and less than 100
establishments, respectively.

Figure 1 shows the average inspection intensity indicator at city level aggregated by state.
Results show sizeable spatial and temporal variation in inspection intensity across the sample.
Lastly, Table 8 reports summary statistics for the main control variables and for the of average
establishment-size at the city level. The statistics suggest a skewed establishment-size
distribution, where the bulk of the cities are concentrated in average establishment size between
5 to 20 employees.

Figure 1 - Inspection intensity indicator by year for selected states

Note: All statistics are based on a sample of 5654 cities in each year. Inspection frequency is measured at the city-level by the number of visits
divided by the number of establishments and aggregated by state. Values are weighted by city-year employment size

Table 8 Summary statistics for whole sample

Share of establishments with 1 to 4 employees 5.5%

Share of establishments with 5 to 9 employees 44.2%

Share of establishments with 10 to 19 employees 28.5%

Share of establishments with 20 to 49 employees 16.7%

Share of establishments with 50+ employees 5.0%

GDP (R$ thousand) 27431109

Inspection frequency 0.33

Share of workers with secondary 0.34

Share of establishments in agriculture 7.7%

Share of establishments in industry 10.8%

Population 2143770

Homicide rate 1044
Source: RAIS and IPEADATA
Note: Table reports the summary statistics (means) for the whole sample
across years. GDP is measured in year 2000 R$ (thousand). Homicide
measured as number per 100000 persons. Inspection Frequency is measured at
the city-level by the number of visits divided by the number of establishments.
Establishment size is defined as the number of employees divided by the
number of establishments.
6- Main Findings

The results of estimating equation (8) by ordinary least squares for job creation and destruction
rates, net job creation, job reallocation, accessions and separations are reported in Table 9. Panel
A does not control for Xjt while panel B includes all the city time varying characteristics. The
findings consistently show that an increase in the enforcement of labor market regulations, as
captured by increased number of inspections per plant, are correlated with increased rates of
gross and net job creation in the city. The findings reported in Panel A of table 9 show that an
increase of one standard deviation in inspection intensity is associate with a job creation rate 1
percentage points higher, a non-negligible value given the average job flow rate in the sample.
Interestingly, there is no evidence that the degree of stringency of labor market regulations are
correlated with job destruction rates at the city level. This may be surprising since one could
expect that an increase in the enforcement will increase the cost of formal labor and thus

eventually lead some of the plants to destroy jobs that are no longer can be affordable to
maintain. However, it is worth stressing that the administrative data that we explore in the paper,
RAIS, only captures formal sector jobs and, to the extent to which job destruction happens
disproportionally in informal jobs this would not be captured in our data. It is thus possible that
we are underestimating the overall amount of job reallocation.
In Panel B of table 9 we control for several city level time variant characteristics to account for
the fact that labor and product market conditions may change over time. Reassuringly, our main
results hold. More frequent labor inspections are positively correlated with higher city level rates
of job creation, net growth, reallocation and accession rates. Estimated coefficients estimated are
smaller after the inclusion of city-varying characteristics, however.
Because the degree of enforcement of labor regulations, varies at the city level and over time,
it is not possible to account for unobservable city trends. Nevertheless we recognize that there
may be important trends at a sub-national level, correlated with changes in enforcement (for
example changes in the quality of other institutions at the sub-national level). To mitigate this
problem in our baseline specification we include also state trends as control variables. The main
findings are reported in Table 10.15 Reassuringly, the inclusion of trends at a local level does not
vary the direction and statistical significance of results when compared to Table 9, except for the
case of separation rates. Higher frequency of labor inspections at the city level are positively
correlated with higher separation rates.
Brazil differs significantly across regions in population density and socio-economic indicators.
Table 11 divides the sample across the five regions - South, North, South-East, North-East, and
Centre-West – to test the robustness of the main results. The results are differentiated across
regions. In particular, estimations suggest that the bulk of the main correlation between
inspection intensity and labor market flows correlations is driven by the Centre-West, North-East
and South-East regions of Brazil.

15
There is a total of 27 states in Brazil and we explore data for 6 years so there is a total of 162 state trends.

Table 9: Enforcement of Labor Regulations and Job Flow Rates

Job Creation Job Destruction Net Job Growth Job Reallocation Accession Separation
Dependent Variable: Rate Rate Rate Rate Rate rate
(1) (2) (3) (4) (5) (6)
Panel A: No City Level Time Variant Controls

Enforcement Labor Regulations in city-year 1.6159*** -0.339 1.9549*** 1.2769*** 1.7416** -0.2134
(0.2975) (0.2311) (0.4110) (0.3390) (0.5558) (0.4881)
Rsquared 0.43 0.27 0.28 0.47 0.77 0.79
Observations 32304 32304 32304 32304 32304 32304
Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
Panel B: Including City-level Time Varying Controls

Enforcement Labor Regulations in city-year 1.4583*** -0.485 1.9433*** 0.9733** 1.6089*** -0.3344
(0.2735) (0.2677) (0.3913) (0.3739) (0.4865) (0.4533)
Rsquared 0.43 0.29 0.28 0.48 0.78 0.79
Observations 32304 32304 32304 32304 32304 32304

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
State-Year Dummies NO NO NO NO NO NO
Sources: Authors calculations using RAIS, Ipeadata and Ministry of Labor-SFIT administrative data on inspections (1996-2006).

Note: T his table reports coefficients from the ordinary least squares estimation of equation (8) in the paper, where the dependent variable is in
column (1) is the job creation rate at city-year level, in column (2) job destruction rate at city- year level, in column (3) Net growth rate at city-
year level (job creation minus job destruction), in column (4) job reallocation rate at city-year level (job creation plus job destruction), in
column (5) hiring rates at city-year level, and in column (6) separation rates at the city-level. In all specifications enforcement of labor
regulations is measured with the number of inspections per establishment in the city. Panel A does not include city level time variant controls
while Panel B includes controls for several observable time varying city characteristics (unreported) including average, median and 75 percentile
of plant size in the city, city level GDP, share establishments in agriculture, share of establishments in industry, average, median and 75
percentile of share of workers with secondary education in the establishment at the city-level, total city population, and total city homicide
rates. *** denotes significance at the 1% level; ** denotes significance at the 5% level; * denotes significance at the 10% level. Robust standard
errors, clustered at the city level, are reported in parentheses. All regressions include city level fixed effects and time dummies. All regressions
are weighted by the average employment in the city in that year.

Table 10: Enforcement of Labor Regulations
Job and Job Flow Rates (With State Trends)
Job Creation Destruction Net Job Growth Job Reallocation Accession Separation
Dependent Variable: Rate Rate Rate Rate Rate rate
(1) (2) (3) (4) (5) (6)

Enforcement Labor Regulations in city-year 1.4314*** -0.4073 1.8386*** 1.0241* 2.7208*** 0.8821*
(0.3413) (0.2347) (0.4021) (0.4260) (0.5903) (0.4496)
Rsquared 0.45 0.31 0.31 0.49 0.79 0.80
Observations 32304 32304 32304 32304 32304 32304

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
State-Year Dummies YES YES YES YES YES YES
Sources: Authors calculations using RAIS, Ipeadata and Ministry of Labor-SFIT administrative data on inspections (1996-2006).
Note: T his table reports coefficients from the ordinary least squares estimation of equation (8) in the paper, where the dependent variable is in column
(1) is the job creation rate at city-year level, in column (2) job destruction rate at city- year level, in column (3) net growth rate at city-year level (job
creation minus job destruction), in column (4) job reallocation rate at city-year level (job creation plus job destruction), in column (5) accession rates
at city-year level, and in column (6) separation rates at the city-level. In all specifications enforcement of labor regulations is measured with the
number of inspections per establishment in the city. Regressions include controls for several observable time varying city characteristics (unreported)
including average, median and 75 percentile of plant size in the city, city level GDP, share establishments in agriculture, share of establishments in
industry, average, median and 75 percentile of share of workers with secondary education in the establishment at the city-level, total city population,
and total city homicide rates. *** denotes significance at the 1% level; ** denotes significance at the 5% level; * denotes significance at the 10%
level. Robust standard errors, clustered at the city level, are reported in parentheses. All regressions include city level fixed effects and time dummies.
All regressions are weighted by the average employment in the city in that year.

Table 11: Enforcement of Labor Regulations and Job Flow Rates by Region

Job Creation Job Net Growth Job Accession Separation
Rate Destruction Rate Reallocation Rate Rate
Dependent variable Rate Rate
(1) (2) (3) (4) (5) (6)
PANEL A - Center West
Enforcement Labor Regulations in city-year 3.0850* -1.8517 4.9368** 1.2333 7.3422** 2.4054
(1.4617) (1.1177) (1.8953) (1.7830) (2.5441) (2.5728)
Rsquared 0.51 0.49 0.26 0.64 0.83 0.83
Observations 1923 1923 1923 1923 1923 1923

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
PANEL B - North East
Enforcement Labor Regulations in city-year 1.1233** -0.7318 1.8551*** 0.3915 1.8575** 0.0024
(0.3978) (0.4241) (0.4806) (0.6673) (0.6772) (0.7512)
Rsquared 0.42 0.26 0.30 0.46 0.74 0.74
Observations 10174 10174 10174 10174 10174

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
PANEL C - North
Enforcement Labor Regulations in city-year 0.8788 -0.1573 1.0361 0.7216 1.2592 0.2231
(0.4775) (0.3792) (0.6538) (0.5623) (0.7905) (0.6537)
Rsquared 0.47 0.28 0.26 0.56 0.73 0.74
Observations 2616 2616 2616 2616 2616

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
PANEL D - South-east

Enforcement Labor Regulations in city-year 2.0838** -0.0821 2.1658* 2.0017* 1.6331 -0.5327
(0.6815) (0.5024) (0.8613) (0.8317) (1.6350) (1.3687)
Rsquared 0.46 0.23 0.29 0.48 0.78 0.78
Observations 10653 10653 10653 10653 10653

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
PANEL E - South
Enforcement Labor Regulations in city-year 3.3175** -2.3955 5.7130** 0.9219 2.941 -2.772
(1.2725) (1.6867) (1.8220) (2.3683) (3.0059) (2.5813)
Rsquared 0.41 0.21 0.27 0.40 0.77 0.77
Observations 6938 6938 6938 6938 6938 6938

Year Dummies YES YES YES YES YES YES
City Dummies YES YES YES YES YES YES
City-level Time Varying Controls YES YES YES YES YES YES
Sources: Authors calculations using RAIS, Ipeadata and Ministry of Labor-SFIT administrative data on inspections (1996-2006).
Note: T his table reports coefficients from the ordinary least squares estimation of equation (8) in the paper, where the dependent variable
is in column (1) is the job creation rate at city-year level, in column (2) job destruction rate at city- year level, in column (3) Net growth
rate at city-year level (job creation minus job destruction), in column (4) job reallocation rate at city-year level (job creation plus job
destruction), in column (5) hiring rates at city-year level, and in column (6) separation rates at the city-level. In all specifications
enforcement of labor regulations is measured with the number of inspections per establishment in the city. Regressions include controls for
several observable time varying city characteristics (unreported) including average, median and 75 percentile of plant size in the city, city
level GDP, share establishments in agriculture, share of establishments in industry, average, median and 75 percentile of share of workers
with secondary education in the establishment at the city-level, total city population, and total city homicide rates. *** denotes
significance at the 1% level; ** denotes significance at the 5% level; * denotes significance at the 10% level. Robust standard errors,
clustered at the city level, are reported in parentheses. All regressions include city level fixed effects and time dummies. All regressions are
weighted by the average employment in the city in that year.

7. Conclusions and Policy Implications

In this paper, we explore the relationship between the enforcement of labor market
regulations and job and worker flow measures. We explore city level data across Brazilian cities,
between 1996 and 2006 to identify whether and how the enforcement of labor regulations are
related to different indicators of job and worker flows. The analysis is based on unique city level
and time series administrative data for Brazil, exploring both the census of all plants in Brazil -
RAIS - and administrative data on labor inspections. Both data sets are collected by the Brazilian
Ministry of Labor and Employment.
Our results suggest that increases in the enforcement of labor market regulations at the city
level is strongly correlated with higher job creation rates. This result is also present between
labor inspection and net growth, reallocation and accession rates. The estimations are consistent
across samples at sub-national level.
These findings are in line with Almeida and Carneiro (2012). There the authors find that, in a
response to a rise in labor inspections there is also an increase in formal employment, together
with a decrease in informal employment, a rise in non-employment, a decline in wages at the top
of the formal wage distribution, and an increase in informal wages. Their argument is that as
inspectors started enforcing compliance with mandated benefits, formal workers pay for more
generous mandated benefits by receiving lower wages. The value that workers place on these
benefits is potentially higher than their cost to employers because they are untaxed. In addition,
wage rigidity (e.g., through minimum wages) prevents downward adjustment at the bottom of the
wage distribution. This causes formal sector jobs at the bottom of the wage distribution, to
become more attractive to informal workers, leading them to switch to the formal sector. In the
process, wages in the informal sector adjust upwards.

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Aplicada, Ribeirão Preto, v. 15, n. 1, p. 45-63, jan./mar. 2011.

DAVIS, Steven and HALTIWANGER, John (1999). Gross Job Flows, in Handbook of Labor
Economics, Volume 3, North-Holland.

DAVIS, Steve; HALTIWANGER, John; and SCHUH, Scott (1996) Job Creation and
Destruction. MIT Press.

FAJNZYLBER, Pablo; MALONEY, William F. & MONTES-ROJAS, Gabriel V. (2011). Does
formality improve micro-firm performance? Evidence from the Brazilian SIMPLES
program,Journal of Development Economics, Elsevier, vol. 94(2), pages 262-276, March.

GRUBER, Jonathan (1997). The Incidence of Payroll Taxation: Evidence from Chile. Journal of
Labor Economics, 15 (3), S72-S100.

HALTIWANGER, John; SCARPETTA, Stefano; and SCHWEIGER, Helena (2010). Cross
country differences in job reallocation: the role of industry, firm size and regulations.
European Bank for Reconstruction and Development. WP 116

KUGLER, Adriana and KUGLER, Maurice (2002). Effects of Payroll Taxes on Employment and
Wages: Evidence from the Columbian Social Security Reform. Center for Research on
Economic Development and Policy Reform, Working Paper No. 134.

KUGLER, Adriana and PICA, G. (2008). Effects of Employment Protection on Job and Worker

Flows: Evidence from the 1990 Italian Reform. Labour Economics, 15 (1).

MAGALHÃES, Henrique (2010). La inspección (o no) del trabajo y las sanciones (o no) por
incumplimiento de la legislación laboral en Brasil, mimeo

MICCO, Alejandro and Carmen PAGES (2004). Employment protection and gross job flows: a
difference-in-difference approach. Inter-American Development Bank, Research Department.

MIGUEL, Antônia. (2004), A Inspeção do Trabalho no Governo FHC: Análise sobre a Política
de Fiscalização do Trabalho. Dissertação de mestrado, Programa de Pós-Graduação em
Ciências Sociais, Universidade Federal de São Carlos, São Carlos, SP.

MONTENEGRO; and PAGES, Carmen (2004). Who Benefits from Labor Market Regulation?
Chile 1960-1998. NBER Working Paper No. 0850.

PIRES, Roberto (2008). Promoting Sustainable Compliance: Styles of Labour Inspection and
Compliance Outcomes in Brazil. International Labour Review v.147, pp. 199-249.

PIRES, Roberto (2010). Flexibilidade, Consistência e Impactos na Gestão do Desempenho
Burocrático - Subsídios para uma Nova Sistemática de Acompanhamento e Avaliação do
Desempenho da Inspeção do Trabalho no Brasil. Documento de Trabalho IPEA/OIT/SIT

PIRES, Roberto (2011). Beyond the Fear of Discretion: Flexibility, performance, and
accountability in the management of regulatory bureaucracies. Regulation and Governance,
forthcoming.

A - Appendix

A.1. Non-compatibility between RAIS and SFIT in the case of new cities

After the 1988 Constitution, there was a spur in creation of new cities in Brazil. This
phenomenon was concentrated in the early nineties but one can still observe new cities in the
sample starting in 1996. This raises the issue that SFIT and RAIS do not incorporate new city
codes into the data set at the same time. While SFIT includes the new city in the year it is
created, RAIS only registers it in the following year. The mismatch creates a few problematic
cases when merging the two data sets. In order to keep the information from the year when a new
city is created, we proceed as follows:

i) Identify city codes appearing in SFIT but not in RAIS in each year.

ii) Check if the code appearing only at SFIT in an specific year can be found at RAIS in the
following year.

iii) If a code follows cases 1 and 2 above, identify the group of firms with the new city code.

iv) Identify in 3 the sub-group of firms appearing at RAIS in the previous year.

v) Impute the new city codes to the information from the labor inspection database.
References (24)
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DAVIS, Steven and HALTIWANGER, John (1999). Gross Job Flows, in Handbook of Labor Economics, Volume 3, North-Holland.
DAVIS, Steve; HALTIWANGER, John; and SCHUH, Scott (1996) Job Creation and Destruction. MIT Press.
FAJNZYLBER, Pablo; MALONEY, William F. & MONTES-ROJAS, Gabriel V. (2011). Does formality improve micro-firm performance? Evidence from the Brazilian SIMPLES program,Journal of Development Economics, Elsevier, vol. 94(2), pages 262-276, March.
GRUBER, Jonathan (1997). The Incidence of Payroll Taxation: Evidence from Chile. Journal of Labor Economics, 15 (3), S72-S100.
HALTIWANGER, John; SCARPETTA, Stefano; and SCHWEIGER, Helena (2010). Cross country differences in job reallocation: the role of industry, firm size and regulations. European Bank for Reconstruction and Development. WP 116
KUGLER, Adriana and KUGLER, Maurice (2002). Effects of Payroll Taxes on Employment and Wages: Evidence from the Columbian Social Security Reform. Center for Research on Economic Development and Policy Reform, Working Paper No. 134.
KUGLER, Adriana and PICA, G. (2008). Effects of Employment Protection on Job and Worker Flows: Evidence from the 1990 Italian Reform. Labour Economics, 15 (1).
MAGALHÃES, Henrique (2010). La inspección (o no) del trabajo y las sanciones (o no) por incumplimiento de la legislación laboral en Brasil, mimeo
MICCO, Alejandro and Carmen PAGES (2004). Employment protection and gross job flows: a difference-in-difference approach. Inter-American Development Bank, Research Department.
MIGUEL, Antônia. (2004), A Inspeção do Trabalho no Governo FHC: Análise sobre a Política de Fiscalização do Trabalho. Dissertação de mestrado, Programa de Pós-Graduação em Ciências Sociais, Universidade Federal de São Carlos, São Carlos, SP.
MONTENEGRO; and PAGES, Carmen (2004). Who Benefits from Labor Market Regulation? Chile 1960-1998. NBER Working Paper No. 0850.
PIRES, Roberto (2008). Promoting Sustainable Compliance: Styles of Labour Inspection and Compliance Outcomes in Brazil. International Labour Review v.147, pp. 199-249.
PIRES, Roberto (2010). Flexibilidade, Consistência e Impactos na Gestão do Desempenho Burocrático -Subsídios para uma Nova Sistemática de Acompanhamento e Avaliação do Desempenho da Inspeção do Trabalho no Brasil. Documento de Trabalho IPEA/OIT/SIT
PIRES, Roberto (2011). Beyond the Fear of Discretion: Flexibility, performance, and accountability in the management of regulatory bureaucracies. Regulation and Governance, forthcoming.
January 11, 2021
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