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Labor costs can be a key determinant of job creation. In developing economies where informal employment remains common, it has also been argued that labor costs can contribute to informality by making employment “off the books” more attractive to employers in relative terms, especially in contexts where labor productivity is low.

Pizzinelli shibataRoman zarateGrover maloneyBilicka seidelWorld bankNational bureau of economic researchSubsidizing social security contributionsJob creationInformality reductionSub saharan africaNational bureauEconomic research