The informal sector plays an important role in the functioning of labor markets in emerging economies. To characterize better this highly heterogeneous sector, we conduct a distributional analysis of the earnings gap between informal and formal employment in Brazil, Mexico and South Africa,...

This paper studies the impact of an increase in the enforcement of labor regulations on unemployment and inequality, using city level data from Brazil. We find that stricter enforcement (affecting the payment of mandated benefits to formal workers) leads to: higher unemployment, less income...

When labor market economists started to work on segmented labor markets, they classified informal employment as a transitory state. At the end of the 20th century, informal employment still persists governments' attempts to eradicate it and represents a growing labor market segment not only in...