TY - BOOK ID - 84542856 TI - Institutions, Informality, and Wage Flexibility : Evidence From Brazil AU - de Carvalho Filho, Irineu. AU - Estevão, Marcello. AU - International Monetary Fund. PY - 2012 SN - 147557262X 147552014X PB - Washington, D.C. : International Monetary Fund, DB - UniCat KW - Labor market KW - Wages KW - Employees KW - Market, Labor KW - Supply and demand for labor KW - Markets KW - Compensation KW - Departmental salaries KW - Earnings KW - Pay KW - Remuneration KW - Salaries KW - Wage-fund KW - Wage rates KW - Working class KW - Income KW - Labor costs KW - Compensation management KW - Cost and standard of living KW - Prices KW - Law and legislation KW - Econometric models. KW - Supply and demand KW - Brazil KW - Economic conditions. KW - Labor KW - Macroeconomics KW - Demand and Supply of Labor: General KW - Unemployment: Models, Duration, Incidence, and Job Search KW - Wages, Compensation, and Labor Costs: General KW - Labor Economics: General KW - Informal Economy KW - Underground Econom KW - Labor-Management Relations, Trade Unions, and Collective Bargaining: General KW - Labour KW - income economics KW - Labor markets KW - Unemployment rate KW - Unemployment KW - Labor economics UR - https://www.unicat.be/uniCat?func=search&query=sysid:84542856 AB - Even though institutions are created to protect workers, they may interfere with labor market functioning, raise unemployment, and end up being circumvented by informal contracts. This paper uses Brazilian microeconomic data to show that the institutional changes introduced by the 1988 Constitution lowered the sensitivity of real wages to changes in labor market slack and could have contributed to the ensuing higher rates of unemployment in the country. Moreover, the paper shows that states that faced higher increases in informality (i.e., illegal work contracts) following the introduction of the new Constitution tended to have smaller drops in wage responsiveness to macroeconomic conditions, thus suggesting that informality serves as a escape valve to an over-regulated environment. ER -