Impact Assessment

Simplification of Labor Registration in Argentina: Achievements and Pending Issues, IADB, 2011

    Description
    From 2005 onwards, a labor registration simplification system was initiated (Mi simplificación) and a new system for paying social security contributions inaugurated (Su declaración) in 2007. As this working paper demonstrates, both are signs of important, albeit partial, progress towards reducing the administrative costs of formalizing labor, particularly among enterprises with five or fewer employees. Their impacts on labor registration are assessed through a qualitative analysis based on an opinion survey of accountants and a further
    econometric impact analysis.

    Summary of results
    The majority of accountants believe that both reforms did simplify the task of employee registration and social security contribution payment, and reduced the time needed for both of these processes.

    The econometric impact analysis, factoring out other variables, indicates that the reforms made the probability of being registered higher than in previous periods (between approximately 1 and 2 percent higher).

    Further Su Declaración was introduced in March 2007 only for those enterprises with five or fewer workers, and extended in March 2008 for firms with between six and ten employees. Analysis shows that from the fourth quarter of 2006 to the fourth quarter of 2007, a statistically significant increase in wage labour registration is only observable in companies employing from one to five people.