In this paper we examine the determinants of the mobility of Brazilian workers from the formal sector to informality, self-employment and unemployment, using longitudinal data from Monthly household surveys for 6 metropolitan regions. The results show that the reduction in formality was due to an increase in the transitions from the formal to the informal sector and to a decline in the exits from unemployment to the formal sector. Moreover, sector turn-over in Brazil is quite high and the transitions from unemployment and from the informal sector are time dependent. Finally, the wage differentials between workers in the formal and in the informal sector, after controlling for workers fixed effects was 10% in the 1980s and declined to about 5% in the 1990s, showing that the Brazilian labor market is close to competitive.
work market; segmentation; transition; employment book; formal and informal market
