Internal Migration and Labor Market Adjustments in the Presence of Non-wage Compensation
The DEMS Economics Seminar series is proud to host
Raphael Corbi
(University of São Paulo)
with T. Ferraz and R. Narita
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.
The seminar will be in presence, Seminar Room 2104, Building U7-2nd floor