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An approximation to the Informal-formal wage gap in Colombia 2008-2012

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  • Nancy Aireth DAZA BAEZ
  • Luis Fernando GAMBOA

Abstract

This document provides recent evidence about the persistency of wage gaps between formal and informal workers in Colombia by using a non-parametric method proposed by Nopo (2008a). Over a rich dataset at a household level during 2008-2012, it is found that formal workers earn between 30 to 60 percent more, on average, than informal workers. Despite of the formality definition adopted, it is clear that formal workers have more economic advantages than informal ones, but after controlling by demographic and labor variables an important fraction of the gap still remains unexplained

Suggested Citation

  • Nancy Aireth DAZA BAEZ & Luis Fernando GAMBOA, 2013. "An approximation to the Informal-formal wage gap in Colombia 2008-2012," Archivos de Economía 11196, Departamento Nacional de Planeación.
    • Handle: RePEc:col:000118:011196
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    References listed on IDEAS

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    Cited by:

    1. Duman, Anil & Duman, Alper, 2021. "The More the Gloomier: development of informal employment and its effect on wages in Turkey," GLO Discussion Paper Series 870, Global Labor Organization (GLO).
    2. Moreno-Monroy, Ana I. & Posada, Héctor M., 2018. "The effect of commuting costs and transport subsidies on informality rates," Journal of Development Economics, Elsevier, vol. 130(C), pages 99-112.
    3. Gustavo A. García, 2017. "Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 985-1017, November.
    4. Duman, Anil, 2020. "Pay Gaps and Mobility for Lower and Upper Tier Informal Sector Employees: an investigation of the Turkish labor market," GLO Discussion Paper Series 655, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Wage gaps; non-parametric; Colombia; informality;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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