Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96
AbstractThis paper tests whether a wage curve—a negative relationship between unemployment and pay—existed in Santiago, Chile during 1957-1996. The analysis is divided into two periods corresponding to the distinct economic models in place in the country. For 1957-1973, during the period of inward-led development, we reject the existence of a wage curve. The second period, 1974-1996, corresponds to an external opening of the economy and the deregulation of publicly controlled industries and labor relations. For this period, we find a wage curve of –0.08, which is similar to the United States and other western, capitalist economies. Disaggregating the analysis for different groups of workers, we find that since the economic reforms, women’s pay falls three times more than men’s when unemployment doubles. Also, non-university educated and public sector workers have suffered greater pay decreases from unemployment. Workers in the informal sector do not experience a drop in pay, contradicting the notion that the informal sector acts as a buffer for unemployed formal-sector workers.
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Bibliographic InfoPaper provided by Schwartz Center for Economic Policy Analysis (SCEPA), The New School in its series SCEPA Working Papers with number 2002-10.
Length: 33 pages
Date of creation: Aug 2002
Date of revision:
wage curve; unemployment; inequality; Chile;
Other versions of this item:
- Janine Berg & Dante Contreras, 2004. "Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96," International Review of Applied Economics, Taylor & Francis Journals, vol. 18(2), pages 151-165.
- J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
- J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2002-09-21 (All new papers)
- NEP-LAB-2002-09-21 (Labour Economics)
- NEP-LAM-2002-09-21 (Central & South America)
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