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Is the wage curve formal or informal? Evidence for Colombia

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  • Ramos, Raul
  • Duque, Juan C.
  • Surinach, Jordi

Abstract

Using microdata from the 2002-2006 Colombian Continuous Household Survey, we find an elasticity of individual wages to local unemployment rates of -Â 0.07. However, the elasticity for informal workers is significantly higher, a result which is consistent with efficiency wage theoretical models and relevant for regional labour market analysis in developing countries.

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Bibliographic Info

Article provided by Elsevier in its journal Economics Letters.

Volume (Year): 109 (2010)
Issue (Month): 2 (November)
Pages: 63-65

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Handle: RePEc:eee:ecolet:v:109:y:2010:i:2:p:63-65

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Web page: http://www.elsevier.com/locate/ecolet

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Keywords: Wage curve Unemployment Formal and informal sectors;

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  1. Maloney, William, 2003. "Informality revisited," Policy Research Working Paper Series 2965, The World Bank.
  2. Bratsberg, Bernt & Turunen, Jarkko, 1996. "Wage curve evidence from panel data," Economics Letters, Elsevier, vol. 51(3), pages 345-353, June.
  3. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc.
  4. Blanchard, O & Katz, L, 1996. "What We Know and Do Not Know about the Natural Rate of Unemployment," Working papers 96-29, Massachusetts Institute of Technology (MIT), Department of Economics.
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  6. Sanz-de-Galdeano, Anna & Turunen, Jarkko, 2006. "The euro area wage curve," Economics Letters, Elsevier, vol. 92(1), pages 93-98, July.
  7. Janine Berg & Dante Contreras, 2004. "Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96," International Review of Applied Economics, Taylor and Francis Journals, vol. 18(2), pages 151-165.
  8. Johnes, Geraint, 2007. "The wage curve revisited: Estimates from a UK panel," Economics Letters, Elsevier, vol. 94(3), pages 414-420, March.
  9. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, 07.
  10. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section..
  11. Moulton, Brent R., 1986. "Random group effects and the precision of regression estimates," Journal of Econometrics, Elsevier, vol. 32(3), pages 385-397, August.
  12. Janssens, Stefan & Konings, Jozef, 1998. "One more wage curve: the case of Belgium," Economics Letters, Elsevier, vol. 60(2), pages 223-227, August.
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