Research

Work in progress

Effect of Labor Inspections on Employee Earning Trajectory: Evidence from Brazil (with Cristiano Carvalho)

Labor inspections are an important tool to tackle the high prevalence of the informal sector and low compliance with labor regulations in developing countries. While inspections could increase the attractiveness of formal jobs by promoting firms’ compliance with all formal work benefits, they could also adversely affect workers’ outcomes by raising the labor costs to the firms. In this study, we combine employee administrative data with firm-level data on labor inspections in Brazil and estimate the effect of labor inspections on worker earnings trajectories in years after the inspection. We find evidence of persistent, negative wage effects 4 years after these inspections, with effects driven by employees who stay in inspected firms. Workers in inspected firms are also more likely to leave their firms upon inspection. Preliminary potential mechanisms explored for the decrease in wages for stayers are passthrough of increasing costs of compliance to employees and the increase in amenity of formal employment due to these inspections.

Labor Enforcement, Schooling and Child Labor (with Cristiano Carvalho)

Developing countries are characterized by a dual labor market with a high prevalence of the informal sector. The informal sector is associated with several costs, such as low productivity, low job security, and, for the government, lower tax revenues. Furthermore, while developing countries may have a lot of labor regulations, most of these regulations are not properly enforced. One policy tool that governments use to tackle these two issues is to use labor inspections to enforce these rules. In this paper, we study how labor enforcement through inspections affects human capital investments and child labor in the context of Brazil. We find that labor inspections increase school attendance and reduce the prevalence of child labor. Both of these effects on schooling and child labor are higher for male students and those with parents with lower education.

Internal Migration and Child Marriage Market: Evidence from Indonesia (Working paper available upon request)

A large body of evidence has documented the adverse effects of child marriage. However, despite various efforts stopping child marriage, it is still prevalent in several low-income countries. In this study, I examine a potential deterrence of child marriage, young outmigration, in the context of internal migration in Indonesia. First, I find that the effects of rainfall droughts on child marriage is attenuated when girls come from districts that have higher network of migrants in baseline, consistent with the idea that girls use marriage to avoid early marital pressure. Second, I show that in response to negative income shocks that increase early marriage pressure, children and youths respond by migrating out for work more relative to girls with less early marriage pressure. This effect is predominantly found for girls and not boys. Furthermore, the effect is also heterogenous by household composition, providing further evidence of the escaping marriage channel.