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Signaling Worker Quality in a Developing Country: Lessons from a Certification Program

Author

Listed:
  • M. Antonella Mancino
  • Leonardo Fabio Morales
  • Diego F. Salazar

Abstract

We evaluate the returns to signaling occupation-specific skills using unique administrative data from a nationwide certification program in Colombia. The program certifies skills and issues three certificates: basic, intermediate, and advanced. We use regression discontinuity methods to compare workers’ earnings around certificateassignment thresholds. Signaling advanced occupation-specific skills yields significant returns: 9.7% on average within two years of certification. Instead, we find no effects from signaling basic or intermediate occupation-specific skills. Two mechanisms drive our findings. First, the increase in earnings for salaried workers comes from promotions within a firm. Second, the certificate facilitates transitions from self-employment to salaried work. **** RESUMEN: En este trabajo evaluamos los beneficios de se˜nalar habilidades específicas de una ocupación, utilizando para dicho fin datos administrativos de un programa de certificaci´on a nivel nacional en Colombia dise˜nado y ejecutado por el SENA. El programa certifica habilidades en tres niveles: básico, intermedio y avanzado. A través de métodos de regresión discontinua comparamos los ingresos de los trabajadores alrededor de los umbrales de asignación de certificados. Se muestra evidencia de que certificar habilidades avanzadas, genera retornos significativos en el ingreso de los trabajadores: 9,7% en promedio dentro de los dos a˜nos posteriores a la certificación. No encontramos efectos de certificar habilidades básicas o intermedias. Dos mecanismos explican estos hallazgos. En primer lugar, el aumento de los ingresos de los trabajadores asalariados proviene de ascensos dentro de las empresas. En segundo lugar, el certificado facilita la transición del trabajo por cuenta propia al trabajo asalariado.

Suggested Citation

  • M. Antonella Mancino & Leonardo Fabio Morales & Diego F. Salazar, 2023. "Signaling Worker Quality in a Developing Country: Lessons from a Certification Program," Borradores de Economia 1259, Banco de la Republica de Colombia.
  • Handle: RePEc:bdr:borrec:1259
    DOI: 10.32468/be.1259
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    More about this item

    Keywords

    Signaling; Labor demand; Wages; Se˜nalización; Demanda Laboral; Salarios;
    All these keywords.

    JEL classification:

    • J01 - Labor and Demographic Economics - - General - - - Labor Economics: General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J44 - Labor and Demographic Economics - - Particular Labor Markets - - - Professional Labor Markets and Occupations

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