completely exempted most firms from making social insurance (SI) contributions, resulting in an average tax cut of 21 percentage … points on formal labor costs and approximately 20% of total tax remittances made by firms. We use novel data on 900,000 firms …-19 relief measure. We calculate that labor informality causes 54% of tax-registered firms---representing 24% of aggregate …

large sector-specific shocks. However, the latter shows much less labor reallocation because ERTEs were available to firms …