Quality of Employment: A Measure of Workers' Preferences

The literature in labor economics for developing countries frequently employs synthetic indices to study quality jobs, especially in contexts of high informality. Typically, two methodologies have been considered for the vertical weighting of quality dimensions: ad hoc and principal component analysis. This paper analyzes job quality from the point of view of workers' preferences. For this purpose, the vertical weighting problem is studied as a discrete choice problem faced by the worker, which can be analyzed with a standardized betas model estimated by ordinary least squares. To illustrate our proposal, we use information from the GEIH, to facilitate the comparative exercise we follow the horizontal weights presented by Farné (2003) and compare our quality index with previous methodological proposals. We found that workers give greater weighting in their order to social security, income, contract and working hours. On the other hand, regardless of the methodology, the quality of employment in the country is low, with important differences between self-employed workers, but not between men and women.