This paper investigates the effect of the minimum wage on employment transitions in Brazil and, in particular, on the informal sector transitions. We estimate the probability of becoming nonemployed (unemployed or out of the labour force) and the probability of moving to the informal sector...

Two facts have characterized the evolution of the informal sector in Brazil during the last two decades: the increase in the proportion of non-registered workers and the diminishing wage gap between non-registered and registered workers. In this paper, we document both the increase of the...