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Is the wage curve formal or informal? Evidence for Colombia

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  • Ramos, Raul
  • Duque, Juan C.
  • Surinach, Jordi

Abstract

Using microdata from the 2002-2006 Colombian Continuous Household Survey, we find an elasticity of individual wages to local unemployment rates of -Â 0.07. However, the elasticity for informal workers is significantly higher, a result which is consistent with efficiency wage theoretical models and relevant for regional labour market analysis in developing countries.

Suggested Citation

  • Ramos, Raul & Duque, Juan C. & Surinach, Jordi, 2010. "Is the wage curve formal or informal? Evidence for Colombia," Economics Letters, Elsevier, vol. 109(2), pages 63-65, November.
    • Handle: RePEc:eee:ecolet:v:109:y:2010:i:2:p:63-65
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    More about this item

    Keywords

    Wage curve Unemployment Formal and informal sectors;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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