01917cas a2200253 a 4500 AALejournalIMF011756 230101c9999 xx r poo 0 0eng d 5.00 USD 9781475502367 1018-5941 BD-DhAAL BD-DhAAL de Carvalho Filho, Irineu. Institutions, Informality, and Wage Flexibility : Evidence From Brazil / Irineu de Carvalho Filho, Marcello Estevao. Washington, D.C. : International Monetary Fund, 2012. 1 online resource (27 pages) IMF Working Papers <strong>Off-Campus Access:</strong> No User ID or Password Required <strong>On-Campus Access:</strong> No User ID or Password Required Electronic access restricted to authorized BRAC University faculty, staff and students 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. Mode of access: Internet Estevao, Marcello. IMF Working Papers; Working Paper ; No. 2012/084 Full text available on IMF http://elibrary.imf.org/view/journals/001/2012/084/001.2012.issue-084-en.xml IMF e-Library