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on Informal and Underground Economics |
| By: | Leo Feler; Arthur Mendes; Wataru Miyamoto; Thuy Lan Nguyen; Steven Pennings |
| Abstract: | This paper provides new evidence on the macroeconomic impact of cash transfers in developing countries. Using a Bartik-style identification strategy, the paper documents that Brazil’s Bolsa Familia transfer program leads to a large and persistent increase in relative state-level GDP, formal employment, and informal employment. A state receiving 1% of GDP in extra transfers grows 2.2% faster in the first year, with R$100, 000 of extra transfers generating five formal-equivalent jobs, half of which are informal. Consistent with a demand-side mechanism, the effects are concentrated in non-tradable sectors. However, an open-economy New Keynesian model only partially captures the high multipliers estimated. |
| Keywords: | fiscal multipliers; cash transfers; Bartik instrument; Bolsa Familia; informality; relative multiplier; local multiplier; developing countries |
| JEL: | E0 E26 E32 O54 |
| Date: | 2023–12–15 |
| URL: | http://d.repec.org/n?u=RePEc:fip:fedfwp:97580&r=iue |
| By: | Eloiza Regina Ferreira de Almeida; Renata Narita |
| Abstract: | This article investigates gender differences in wage losses in Brazil resulting from job dismissal and periods of non-formal employment. It examines the wage dynamics of men and women to determine the occurrence and magnitude of these losses, as well as the subsequent recovery process upon returning to formal employment. Using administrative employer-employee data from 2003 to 2018, the study employs a matching strategy and event-study estimation to analyze the transitions from formal employment. Estimations are conducted separately for men and women. The findings reveal that both genders experience immediate and persistent wage losses after leaving formal employment. Women generally experience lower losses (7.4%) compared to men (10.5%), but men exhibit a faster recovery within the first three years after reentering formal employment. Additionally, longer periods of non-formal employment are associated with higher wage losses. Workers who voluntarily leave their jobs experience losses 60% lower than those who are dismissed, and they fully recover their wages within the second year after reentering formal employment. This study emphasizes the importance of examining job transitions and their impact on wages throughout individuals' careers, particularly concerning gender differentials. |
| Keywords: | Wage differences; gender differences; job dismissal |
| JEL: | J16 J31 J63 |
| Date: | 2024–01–09 |
| URL: | http://d.repec.org/n?u=RePEc:spa:wpaper:2024wpecon1&r=iue |
| By: | Can, Ege (University of Nevada, Reno); Fossen, Frank M. (University of Nevada, Reno) |
| Abstract: | We investigate the effect of personal income tax (PIT) rates on the number of hours entrepreneurs work weekly. Using the rotating panel data from the Annual Social and Economic Supplement of the Current Population Survey from 2003 to 2019, we estimate instrumental variable regressions in first differences to exploit changes in the tax code for identification. We distinguish between self-employed owners of incorporated versus unincorporated businesses and examine their differential responses. The findings reveal that higher individual-specific marginal PIT rates increase the hours worked among entrepreneurs with incorporated businesses, which could be explained by the availability of tax avoidance strategies. Among unincorporated entrepreneurs, we find a significant response to PIT rates in hours worked only for those who work 50 or more hours per week. |
| Keywords: | income taxes, entrepreneurship, self-employment, labor supply, incorporated, unincorporated |
| JEL: | H24 H25 J22 J23 L26 |
| Date: | 2023–12 |
| URL: | http://d.repec.org/n?u=RePEc:iza:izadps:dp16683&r=iue |