Autores: Brenda Samaniego de la Parra y Bhavyaa Sharma 

Resumen: Formal jobs in Mexico provide workers and their families various social benefits such as retirement funds, minimum wages, day-care and health care services. Despite these benefits, neither the head of household nor their spouse have formal jobs in one-third of Mexican households. We construct an employer-employee-household matched panel dataset and exploit exogenous variation in access to a formal job caused by over 300,000 work-site inspections to examine how spousal labor supply responds to changes in the household's formality status. Work-site inspections increase the probability of transitions from informal to formal contracts for the inspected worker. For spouses of inspected workers with low education levels, we find evidence of a 16 percent increase in reservation wages and lower employment probability in the formal sector. We then develop a model of joint labor supply with informal and formal contracts and use it to estimate the value of a formal job. The model estimates indicate a marginal willingness to pay equal to 24.3 percent of the mean formal wage among households with low education. This value is higher for households with children in day-care age.