Social protection systems and decent jobs in the context of (in)formal labor markets

by Katharina Fietz
Doctoral thesis
Date of Examination:2025-06-11
Date of issue:2025-07-11
Advisor:Prof. Dr. Jann Lay
Referee:Prof. Dr. Jann Lay
Referee:Prof. Dr. Marcela Ibañez Diaz
Referee:Prof. Dr. Joana Silva
Persistent Address: http://dx.doi.org/10.53846/goediss-11375

 

 

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Abstract

English

This dissertation explores the interplay between social protection systems, decent work, and labor market dynamics through four empirical chapters conducted in Brazil and Côte d'Ivoire. Chapter 1 examines exit dynamics from Brazil’s conditional cash transfer program Bolsa Familia using panel data analysis combined with a shift-share instrument approach. The results show that local employment growth modestly increases the likelihood of beneficiary exit, particularly in multi-adult households. Chapter 2 uses a discrete choice experiment with nearly 5,000 Brazilian workers to estimate their willingness to pay for formal employment. On average, workers are willing to forgo 15% of their wages for a formal job, though this valuation varies across subgroups and may fall short of the cost of formalization. Providing information increases valuation; however, the effect is especially strong among workers already inclined toward formality. Chapter 3 evaluates a light-touch consulting intervention for micro, small, and medium-sized enterprises (MSMEs) in Côte d'Ivoire using a randomized controlled trial. The program led to an increase in formalization, primarily through improved minimum wage compliance and the provision of written contracts without negatively affecting firm performance. The results suggest that low-cost, non-coercive approaches can promote employment formalization in MSMEs in Côte d'Ivoire. Chapter 4 shifts the focus to people already in formal employment, analyzing how racial peer composition affects worker retention in Brazil. Using unexpected coworker deaths as an exogenous shock to the racial composition of a peer group, the chapter shows that non-white workers are more likely to quit when they lose a same-race peer. This effect is more pronounced in firms with larger racial wage gaps and weaker in occupations with high levels of teamwork. These findings highlight the importance of peer effects in sustaining workplace diversity and the need for policies that promote inclusive work environments beyond hiring. Together, the chapters provide evidence on how labor market policies, social protection systems, and firm- and worker-level incentives interact.
Keywords: Labor markets; social protection; informality; decent jobs
 
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