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International Trade, Labor Flexibilization, and Wage Inequality: The Colombian Manufacturing Case

Author

Listed:
  • Hernández-Luna Yezid
  • Salazar-Pérez Camila

    (Faculty of Economics and Administrative Sciences, Jorge Tadeo Lozano University, Carrera 4 # 22-61, Bogotá, Colombia)

  • Herrera-Cuartas Jorge A.

    (Full Professor, Faculty of Natural Sciences and Engineering, Jorge Tadeo Lozano University, Carrera 4 # 22-61, Bogotá, Colombia)

Abstract

This article delivers empirical evidence for the Colombian manufacturing sectors (during 1993–2012 and the subperiod 2000–2012) regarding the relationship between trade integration after the openness policy and the sector skill intensity over the skill premia, which depends on the Skill Biased Technical Change. We find that international trade reduces the positive sector skill intensity effect on wage inequality, moderately benefiting unskilled workers; however, a negative impact of the 1990 labor flexibilization on the skill premia, which increased the hiring of less expensive temporary and agency workers. Furthermore, the positive sector skill intensity impact on wage inequality is more important for trade with less developed countries than with the developed ones.

Suggested Citation

  • Hernández-Luna Yezid & Salazar-Pérez Camila & Herrera-Cuartas Jorge A., 2023. "International Trade, Labor Flexibilization, and Wage Inequality: The Colombian Manufacturing Case," Journal of Globalization and Development, De Gruyter, vol. 14(1), pages 87-146, June.
    • Handle: RePEc:bpj:globdv:v:14:y:2023:i:1:p:87-146:n:3
    DOI: 10.1515/jgd-2022-0017
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    More about this item

    Keywords

    emerging countries; international trade; labor flexibilization; manufacturing sector; skill premia; skill-biased technical change;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition
    • J88 - Labor and Demographic Economics - - Labor Standards - - - Public Policy
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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