Encargos sociais e demanda por trabalho no setor formal da economia

Resumen

This paper analyses theoretically the Brazilian debate about employees' pay roll social contribution. To evaluate the social contribution burden on pay roll it uses employees welfare as criterion of the analysis. It proposes as measure of this burden the difference between costs and benefits both imposed by law, where the benefits are a worker's subjective dimension. Therefore, the social contribution burden has a precise meaning. It is similar to pay roll tax and it provides a measure of the incentive to employers and employees to move from formal to informal labor market. This paper deals also with the matter of the changing the collection source, from pay roll tax to value added tax. It concludes it isn't a proposition to be defended easily.