Title: Informalize Work : Taxes / Benefits / and Incentives in Latin America and the Caribbean
Publisher: The World Bank
Publication Date: 2025
Language: English
ISBN 10: 1464822387
ISBN 13: 9781464822384
Binding: Soft cover
Condition: New

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This report aims to deepen our understanding of informality of work and employment outcomes in Latin American and Caribbean labor markets, focusing on the interplay between personal income taxation, social protection policies, and consequently firm and workers' incentives to (in)formalize agreements. The report introduces a new analytical framework that centers on individual worker decisions, based on the value workers ascribe to present and future (contingent) benefits as compared with their costs, alongside negotiations with employers shaped by labor market competitiveness. Empirical analysis identifies and quantifies incentives for (in)formal employment and to simulate how reforms to policies and programs affect these incentives. This analysis underpins recommendations to improve the incentives to formalize employment and participate in personal income tax and social protection systems across LAC countries.

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