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Wage differentials across economic sectors in the Colombian formal labour market: evidence from a survey of firms

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Listed author(s):
  • Ana María Iregui B.

    ()

  • Ligia Alba Melo B.

    ()

  • María Teresa Ranírez G.

    ()

Abstract

The existence of wage differentials across sectors is a widely observed phenomenon. This paper provides new elements to understand inter and intra-sectoral wage differentials in Colombia by analysing a wage setting survey of 1305 firms and emphasizing the role of firm characteristics. The results from the descriptive analysis of the survey confirm the existence of substantial wage differentials across sectors and occupational positions in the country. We found positive wage differentials, with respect to the average of the economy for the different occupational groups, in electricity, gas, water and mining, financial services and manufacturing and strong negative wage differentials in agriculture, forestry and fishing. When analysing wage differential within each occupational group, higher wage dispersion is observed in the case of managers, followed by professionals. The lower wage dispersion for the least qualified jobs could be associated with the existence of a minimum wage in the country. In addition, we estimate cross section models for each occupational group and sector to account for the importance of firm characteristics in explaining wage differentials.

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Paper provided by Banco de la Republica de Colombia in its series Borradores de Economia with number 629.

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Date of creation: Nov 2010
Handle: RePEc:bdr:borrec:629
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Keywords: Wage differentials; survey of firms; labour market; cross section estimation. Classification JEL: J30; J31; C21;

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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
  • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

References listed on IDEAS
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  1. Alejandro Hoyos & Hugo Ñopo & Ximena Peña, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," DOCUMENTOS CEDE 007094, UNIVERSIDAD DE LOS ANDES-CEDE.
  2. Philip Du Caju & Gábor Kátay & Ana Lamo & Daphne Nicolitsas & Steven Poelhekke, 2010. "Inter-Industry Wage Differentials In EU Countries: What Do Cross-Country Time Varying Data Add to the Picture?," Journal of the European Economic Association, MIT Press, vol. 8(2-3), pages 478-486, 04-05.
  3. 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 582, Banco de la Republica de Colombia.
  4. Björklund, Anders & Bratsberg, Bernt & Eriksson, Tor & Jäntti, Markus & Raaum, Oddbjørn, 2004. "Inter-Industry Wage Differentials and Unobserved Ability: Siblings Evidence from Five Countries," IZA Discussion Papers 1080, Institute for the Study of Labor (IZA).
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Cited by:

  1. Ana María Iregui & Ligia Alba Melo & María Teresa Ramírez, 2014. "Wage‐setting Decisions on Newly Hired Employees: Survey Evidence from Colombian Firms," Managerial and Decision Economics, John Wiley & Sons, Ltd., vol. 35(3), pages 231-246, 04.
  2. Ana María iregui & Ligia Alba Melo B. & María Teresa Ramírez G., 2010. "Wage-setting Decisions on Newly Hired Employees:," BORRADORES DE ECONOMIA 007808, BANCO DE LA REPÚBLICA.
  3. Carmiña O. Vargas, 2011. "Desigualdad de salarios en Colombia: evidencia a partir de encuestas de hogares 1984 -2010," Borradores de Economia 661, Banco de la Republica de Colombia.
  4. Diego Winkelried, 2014. "Exchange rate pass-through and inflation targeting in Peru," Empirical Economics, Springer, vol. 46(4), pages 1181-1196, June.

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