Evidence on Labor Market Policies and Implications for Brazil: Informality
Informality remains a central feature of the Brazilian labor market, affecting around 38 percent of the workforce. Although the country experienced a significant decline in informality during the 2000s, mainly due to rising education levels, progress has since stagnated. Informality continues to disproportionately affect low-income workers, women, and Black Brazilians. This publication reviews rigorous impact evaluations to identify which policies and program characteristics are most effective in promoting formalization. Interventions that combine simplified registration processes, personalized support, and financial incentives tend to yield better results, especially when tailored to the specific profiles of informal workers. However, many programs still face challenges related to cost-effectiveness and long-term sustainability. This study was produced in co-authorship by JOI Brazil, an initiative of J-PAL LAC, and the Inter-American Development Bank, and discusses recent findings and their implications for the development of public policies that support inclusive and sustained transitions into formal employment.
