Labor market regulations may constrain the availability of part-time jobs, creating challenges for workers who prefer shorter hours. I provide empirical evidence that mothers with young children in Mexico are more likely to work informally due to the limited availability of short-hour employment in the formal sector. I analyze two distinct life events that increase mothers’ demand for shorter hours: childbirth and the loss of childcare support following the death of a grandmother. In both cases, mothers are more likely to transition to informal employment, with adjustments in working hours occurring exclusively within the informal sector. I develop a model of labor supply and sector choice based on the key assumption that the formal sector does not accommodate shorter hours. Using this model, I evaluate two potential policy interventions: reducing constraints on minimum hours in the formal sector and expanding subsidized childcare. I find that relaxing minimum-hour constraints in the formal sector increases the share of formal employment for women, raises their wages and welfare, and, unlike expanding subsidized childcare, does so without straining the government budget.

Public transportation infrastructure is crucial for shaping labor market outcomes, especially in cities across developing countries where inadequate transit options often limit access to formal employment. In cities like Mexico City, formal jobs are typically concentrated in the center, while peripheral areas suffer from long and costly commutes. In this paper, we ask to what extent the lack of public transportation infrastructure causes a misallocation of labor into informal work, and how commuting frictions affect men and women differently. We evaluate the impact of a new public transportation system—a cable bus—on the transition to formal employment. Using changes in commute times, we analyze the relevance of three key frictions: proximity, flexibility, and safety. Our findings show that reduced commute times encourage shifts from informal to formal employment, with significantly larger effects for women. Notably, shorter walking times are the most critical factor for women, highlighting that safety concerns are a major barrier keeping women out of formal employment.  

This paper examines the unintended consequences of stringent childcare regulations on women’s labor market outcomes in the United States. The U.S. is one of the few advanced economies that does not provide universal public childcare. Over recent decades, the financial burden of childcare has risen sharply, with costs more than doubling between 1990 and 2020. Using variations in state childcare regulations, specifically minimum square footage requirements, and their timing, I estimate the effects of childcare costs on female labor force participation and hours worked. The results indicate no significant impact on the extensive margin of labor force participation. However, there is a significant negative effect on the intensive margin, primarily affecting low-skill workers. This disparity is explained by differences in childcare arrangements used between low- and high-skill women. Low-skill women, who often rely on family-based childcare, face greater challenges substituting informal care for formal care, leading them to reduce their working hours. In contrast, high-skill women, who frequently use babysitters, can expand their use of such services without reducing their hours worked.

To what extent do firms in developing countries comply with minimum wage laws, and how do they affect the location decision of workers? Tanzania enacted its first minimum wage law in 2010, which stipulated different levels for each industry. Using data from Tanzania’s annual census of firms, we find evidence of partial firm compliance, with heterogeneous effects on hiring and vacancy posting. We show that both wages and the likelihood of finding a job affect the location decision of migrants. To quantify the role of minimum wages on the geographic distribution of economic activity, we develop a spatial equilibrium model of search and matching that features limited government enforcement of the minimum wage. We find that labor markets in which the minimum wage was more binding experienced gains in population, employment, and wages. Conversely, the labor market tightness declined in locations that lost population, compounding the adverse employment effects of a minimum wage. Overall, minimum wages reduce efficiency by causing workers to move into less productive locations and accept fewer jobs. In a counterfactual analysis, we find that a national, rather than local, minimum wage reduces the shortfall in efficiency by reducing the cross-sectional variation in the value of labor markets.