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An estimation of the wage curve for Uruguay

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Author Info
Marisa Bucheli () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
Cecilia González () (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)
Abstract

This paper analyzes the existence of a wage curve in Uruguay. We run several models using data for the period 1986-2005. We use two different proxies of the wage and we estimate both microdata and cell-mean regressions. Besides, we run the model for the whole sample and for groups of individuals disaggregated by level of education, gender, age and occupation. The results are consistent with the range of values found in similar studies for other countries. We find a negative relation between unemployment and wages. Specifically, we obtain an elasticity of -0.09. We find a higher elasticity for the youth, women and less educated workers. We also obtain difference results when disaggregating by occupation and formality. The results suggest that an increase of unemployment pushes up informality and self-employment which lead to a depression of earnings in these sectors. Thus, informality and self-employment would act as a buffer for unemployed formal wage earners.

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Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 1107.

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Length: 21 pages
Date of creation: Oct 2007
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Handle: RePEc:ude:wpaper:1107

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Keywords: wage curve unemployment

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Find related papers by JEL classification:
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
J60 - Labor and Demographic Economics - - Mobility, Unemployment, and Vacancies - - - General

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  1. David Card, 1995. "The Wage Curve: A Review," Working Papers 722, Princeton University, Department of Economics, Industrial Relations Section.. [Downloadable!]
  2. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-44, June. [Downloadable!] (restricted)
  3. David G. Blanchflower & Andrew J. Oswald, 2005. "The Wage Curve Reloaded," NBER Working Papers 11338, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. David G. Blanchflower & Andrew J. Oswald, 1990. "The Wage Curve," NBER Working Papers 3181, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  5. Ipek Ilkkaracan & Raziye Selim, 2003. "The role of unemployment in wage determination: further evidence on the wage curve from Turkey," Applied Economics, Taylor and Francis Journals, vol. 35(14), pages 1589-1598, September. [Downloadable!] (restricted)
  6. repec:fth:prinin:343 is not listed on IDEAS
  7. Groot Wim & Mekkelholt Eddie & Oosterbeek, Hessel, 1992. "Further evidence on the wage curve," Economics Letters, Elsevier, vol. 38(3), pages 355-359, March. [Downloadable!] (restricted)
  8. Daniel Miles & Máximo Rossi, 2001. "Wage Inequality in Developing Countries: Market Forces or Government Intervention," Documentos de Trabajo (working papers) 1001, Department of Economics - dECON. [Downloadable!]
  9. Simonetta Longhi & Peter Nijkamp & Jacques Poot, 2004. "Spatial Heterogeneity and the Wage Curve Revisited," ERSA conference papers ersa04p115, European Regional Science Association. [Downloadable!]
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  10. David Card, 1995. "The Wage Curve: A Review," Journal of Economic Literature, American Economic Association, vol. 33(2), pages 285-299, June. [Downloadable!] (restricted)
  11. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics. [Downloadable!]
  12. Hoddinott, John, 1996. "Wages and Unemployment in an Urban African Labour Market," Economic Journal, Royal Economic Society, vol. 106(439), pages 1610-26, November. [Downloadable!] (restricted)
  13. Esteban Sanroma Melendez & Raul Ramos Lobo, 2003. "Wage curves for Spain. Evidence from the family budget survey," Working Papers in Economics 101, Universitat de Barcelona. Espai de Recerca en Economia. [Downloadable!]
  14. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Blackwell Publishing, vol. 19(3), pages 421-450, 07. [Downloadable!] (restricted)
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