Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96
AbstractThis paper tests whether a wage curve—a negative relationship between the level of unemployment and the level of pay—existed in Chile during 1957-96. The analysis is divided into two periods. For 1957-73, during inward-led development, we reject the existence of a wage curve. For 1974-96, when the economy opened, state-run industries were privatised and labour rights weakened, we find a wage curve of -0.08. Based on this finding we conclude that the unemployment-pay elasticity in the post-reform period is similar to the -0.07 to -0.10 wage curve found in other western, capitalist countries. Disaggregating the analysis by group, we find that women, non-university educated workers and public sector workers have suffered more from unemployment. Yet informal sector workers have not experienced pay drops as a result of unemployment, contradicting the hypothesis that the informal sector acts as a buffer during economic downturns.
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Bibliographic InfoArticle provided by Taylor & Francis Journals in its journal International Review of Applied Economics.
Volume (Year): 18 (2004)
Issue (Month): 2 ()
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Other versions of this item:
- Janine Berg & Dante Contreras, 2002. "Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96," SCEPA working paper series. SCEPA's main areas of research are macroeconomic policy, inequality and poverty, and globalization. 2002-10, Schwartz Center for Economic Policy Analysis (SCEPA), The New School.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
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