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Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms

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  • Iregui B., Ana Maria

    ()

  • Melo B., Ligia Alba

    ()

  • Ramírez G., María Teresa

    ()

Abstract

Resumen: Este artículo utiliza una encuesta a 1.305 firmas para evaluar las prácticas de ajustes salariales de las empresas en el mercado laboral colombiano. Específicamente, se analiza la frecuencia de los incrementos salariales y el vínculo entre los cambios de precios y salarios. Los resultados muestran que los salarios se ajustan anualmente, que los aumentos se concentran alrededor de la inflación observada y que ninguna empresa recortó los salarios. Además, los principales determinantes de dichos ajustes son factores asociados con el desempeño tanto de empresas como de trabajadores. La relación entre los cambios en salarios y precios es más fuerte en sectores donde los costos laborales representan una mayor proporción de los costos totales y en sectores con alta productividad laboral.Abstract: This paper explores firms´ wage adjustment practices in the Colombian formal labor market; specifically, the timing and frequency of wage increases, as well as the link between wage and price changes. We use a survey of 1,305 firms belonging to all economic sectors. The results show that most firms adjust base wages annually, increases were concentrated around observed inflation and none of the firms cut wages. Moreover, factors associated with the performance of firms and workers alike are the main determinants of wage adjustments. The link between wages and price changes is stronger in sectors where labor costs represent a higher share of total costs and in firms operating in sectors with higher labor productivity.

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File URL: http://aprendeenlinea.udea.edu.co/revistas/index.php/lecturasdeeconomia/article/view/12811/11542
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Article provided by UNIVERSIDAD DE ANTIOQUIA - CIE in its journal REVISTA LECTURAS DE ECONOMÍA.

Volume (Year): (2012)
Issue (Month): (June)
Pages:

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Handle: RePEc:col:000174:010147
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Keywords: incrementos salariales; mercado laboral; encuestas; modelos logit; Colombia;

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Find related papers by JEL classification:
  • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
  • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
  • C25 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions; Probabilities

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  1. John B. Taylor, 1998. "Staggered Price and Wage Setting in Macroeconomics," NBER Working Papers 6754, National Bureau of Economic Research, Inc.
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  8. Ana María Iregui & Ligia Alba Melo & María Teresa Ramírez, 2009. "Formación e incrementos de salarios en Colombia: Un estudio microeconómico a partir de una encuesta a nivel de firma," BORRADORES DE ECONOMIA 006286, BANCO DE LA REPÚBLICA.
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  11. Ana María Iregui B. & Ligia Alba Melo B. & María Teresa Ramírez G., . "Downward Wage Rigidities and Other Firms’ Responses to an Economic Slowdown: Evidence from a Survey of Colombian Firms," Borradores de Economia 612, Banco de la Republica de Colombia.
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Cited by:

  1. Fernando Borraz & Gerardo Licandro & Daniela Sola, 2013. "Wage and Price Setting. New Evidence from Uruguayan Firms," Documentos de trabajo 2013008, Banco Central del Uruguay.
  2. Sonia A. Agudelo & Hector Sala, 2016. "Wage setting in the Colombian manufacturing industry," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 24(1), pages 99-134, 01.

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