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Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms

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  • Iregui B., Ana Maria

    ()

  • Melo B., Ligia Alba

    ()

  • Ramírez G., María Teresa

    ()

Abstract

Resumen: Este artículo utiliza una encuesta a 1.305 firmas para evaluar las prácticas de ajustes salariales de las empresas en el mercado laboral colombiano. Específicamente, se analiza la frecuencia de los incrementos salariales y el vínculo entre los cambios de precios y salarios. Los resultados muestran que los salarios se ajustan anualmente, que los aumentos se concentran alrededor de la inflación observada y que ninguna empresa recortó los salarios. Además, los principales determinantes de dichos ajustes son factores asociados con el desempeño tanto de empresas como de trabajadores. La relación entre los cambios en salarios y precios es más fuerte en sectores donde los costos laborales representan una mayor proporción de los costos totales y en sectores con alta productividad laboral.Abstract: This paper explores firms´ wage adjustment practices in the Colombian formal labor market; specifically, the timing and frequency of wage increases, as well as the link between wage and price changes. We use a survey of 1,305 firms belonging to all economic sectors. The results show that most firms adjust base wages annually, increases were concentrated around observed inflation and none of the firms cut wages. Moreover, factors associated with the performance of firms and workers alike are the main determinants of wage adjustments. The link between wages and price changes is stronger in sectors where labor costs represent a higher share of total costs and in firms operating in sectors with higher labor productivity.

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Bibliographic Info

Article provided by UNIVERSIDAD DE ANTIOQUIA - CIE in its journal REVISTA LECTURAS DE ECONOMÍA.

Volume (Year): (2012)
Issue (Month): ()
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Handle: RePEc:col:000174:010147

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Keywords: incrementos salariales; mercado laboral; encuestas; modelos logit; Colombia;

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  1. M. Druant & S. Fabiani & Gabor Kezdi & Ana Lamo & Fernando Martins & R. Sabbatini, 2009. "How are Firms’ Wages and Prices Linked: Survey Evidence in Europe," Working Papers, Banco de Portugal, Economics and Research Department w200918, Banco de Portugal, Economics and Research Department.
  2. Martha Misas A. & Juan Carlos Parra A. & Enrique López E., 2011. "Heterogeneidad en la fijación de precios en Colombia: análisis de sus determinantes a partir de modelos de conteo," VNIVERSITAS ECONÓMICA, UNIVERSIDAD JAVERIANA - BOGOTÁ 008301, UNIVERSIDAD JAVERIANA - BOGOTÁ.
  3. Babecký, Jan & Du Caju, Philip & Kosma, Theodora & Lawless, Martina & Messina, Julián & Rõõm, Tairi, 2009. "Downward Nominal and Real Wage Rigidity: Survey Evidence from European Firms," Working Paper Series, European Central Bank 1105, European Central Bank.
  4. Bertola, Giuseppe & Dabusinskas, Aurelijus & Hoeberichts, Marco M. & Izquierdo, Mario & Kwapil, Claudia & Montornès, Jérémi & Radowski, Daniel, 2010. "Price, wage and employment response to shocks: evidence from the WDN survey," Working Paper Series, European Central Bank 1164, European Central Bank.
  5. Ana María Iregui & Ligia Alba Melo & María Teresa Ramírez, . "Formación e incrementos de salarios en Colombia: Un estudio microeconómico a partir de una encuesta a nivel de firma," Borradores de Economia, Banco de la Republica de Colombia 582, Banco de la Republica de Colombia.
  6. Jan Babecky & Kamil Dybczak & Kamil Galuscak, 2008. "Survey on Wage and Price Formation of Czech Firms," Working Papers, Czech National Bank, Research Department 2008/12, Czech National Bank, Research Department.
  7. Ernestas Virbickas, 2010. "Wage and Price Setting Behaviour of Lithuanian Firms," Bank of Lithuania Working Paper Series, Bank of Lithuania 7, Bank of Lithuania.
  8. Giovanni Olivei & Silvana Tenreyro, 2008. "Wage setting patterns and monetary policy: international evidence," LSE Research Online Documents on Economics, London School of Economics and Political Science, LSE Library 19572, London School of Economics and Political Science, LSE Library.
  9. Luis Eduardo Arango & Luz Karine Ardila & Miguel Ignacio Gömez, . "Efecto del cambio del salario mínimo en el precio de las comidas fuera del hogar en Colombia," Borradores de Economia, Banco de la Republica de Colombia 584, Banco de la Republica de Colombia.
  10. Campbell, Carl M, III & Kamlani, Kunal S, 1997. "The Reasons for Wage Rigidity: Evidence from a Survey of Firms," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(3), pages 759-89, August.
  11. Ana María Iregui B. & Ligia Alba Melo B. & María Teresa Ramírez G., 2010. "Downward Wage Rigidities and Other Firms´ Responses to an Economic Slowdown: Evidence from a Survey of Colombian Firms," BORRADORES DE ECONOMIA, BANCO DE LA REPÚBLICA 007195, BANCO DE LA REPÚBLICA.
  12. Mihai Copaciu & Florian Neagu & Horia Braun-Erdei, 2010. "Survey evidence on price-setting patterns of Romanian firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 31(2-3), pages 235-247.
  13. Ana María Iregui B. & Ligia Alba Melo B. & María Teresa Ramírez G., . "Are wages rigid in Colombia?: Empirical evidence based on a sample of wages at the firm level," Borradores de Economia, Banco de la Republica de Colombia 571i, Banco de la Republica de Colombia.
  14. Juan Manuel Julio & Héctor Manuel Zárate & Manuel Dario Hernández, . "The Stickiness of Colombian Consumer Prices," Borradores de Economia, Banco de la Republica de Colombia 578, Banco de la Republica de Colombia.
  15. Ana María Iregui & Ligia Alba Melo & María Teresa Ramírez, 2010. "Incrementos y rigideces de los salarios en Colombia: Un estudio a partir de una encuesta," REVISTA DE ECONOMÍA DEL ROSARIO, UNIVERSIDAD DEL ROSARIO.
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