Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/315118 
Year of Publication: 
2025
Series/Report no.: 
Texto para discussão No. 702
Publisher: 
Pontifícia Universidade Católica do Rio de Janeiro (PUC-Rio), Departamento de Economia, Rio de Janeiro
Abstract: 
In this paper, we argue that adjustments in non-wage compensation are empirically relevant and have important implications for understanding the effects of labor supply shocks. We examine the labor market impacts of internal migration in Brazil through a shift-share approach, which combines weather-induced migration with historical settlement patterns at each destination. Our findings indicate that increasing migration inflows lead to a reduction in formal employment while simultaneously increasing informality by a similar magnitude. Unlike previous studies, we observe a significant negative impact on earnings within the formal sector. Additionally, we provide evidence that the proportion of formal workers receiving non-wage benefits declines, underscoring that substantial adjustments take place in the formal sector, even in a context of high informality. We interpret our results within a framework where formal and informal labor inputs are imperfect substitutes and where non-wage benefits generate predictions that align closely with our empirical findings.
Subjects: 
Internal migration
wages
employment
non-wage benefits
JEL: 
J2
J3
J61
O15
Document Type: 
Working Paper

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