IDEAS home Printed from https://ideas.repec.org/p/cid/wpfacu/72a.html
   My bibliography  Save this paper

Determinants of Labor Demand in Colombia, 1976-1996

Author

Listed:
  • Mauricio Cardenas
  • Raquel Bernal

Abstract

Colombia's unemployment rate rose to 20% during the late 1990s from less than 8% in 1994. This paper argues that this has been the result of high non-wage labor costs embodied in the legislation. The estimated own-wage labor demand elasticity is around -0.5, which implies that a reduction in those costs, while politically costly, can have a significant payoff in terms of equity and efficiency.

Suggested Citation

  • Mauricio Cardenas & Raquel Bernal, 2001. "Determinants of Labor Demand in Colombia, 1976-1996," CID Working Papers 72A, Center for International Development at Harvard University.
    • Handle: RePEc:cid:wpfacu:72a
    as

    Download full text from publisher

    File URL: https://www.hks.harvard.edu/sites/default/files/centers/cid/files/publications/faculty-working-papers/072.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Eduardo Lora & Carmen Pagés-Serra, 1997. "La legislación laboral en el proceso de reformas estructurales de América Latina y el Caribe," Research Department Publications 4065, Inter-American Development Bank, Research Department.
    2. David G. Blanchflower & Andrew J. Oswald, 1995. "The Wage Curve," MIT Press Books, The MIT Press, edition 1, volume 1, number 026202375x, April.
    3. Burgess, Simon M & Dolado, Juan J, 1989. "Intertemporal Rules with Variable Speed of Adjustment: An Application to U.K. Manufacturing Employment," Economic Journal, Royal Economic Society, vol. 99(396), pages 347-365, June.
    4. Hamermesh, Daniel S., 1987. "The demand for labor in the long run," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 8, pages 429-471, Elsevier.
    5. Stefano Farné & Oskar Andrés Nupia, 1996. "Reforma laboral, empleo e ingresos de los trabajadores temporales en Colombia," Coyuntura Social 13209, Fedesarrollo.
    6. Burda, Michael C., 1991. "Monopolistic competition, costs of adjustment, and the behavior of European manufacturing employment," European Economic Review, Elsevier, vol. 35(1), pages 61-79, January.
    7. Gruber, Jonathan, 1997. "The Incidence of Payroll Taxation: Evidence from Chile," Journal of Labor Economics, University of Chicago Press, vol. 15(3), pages 72-101, July.
    8. Mauricio Cárdenas S. & Andrés Escobar A. & Catalina Gutiérrez S., 1995. "La contribución de la infraestructura a la actividad económica en Colombia 1950 - 1994," Revista ESPE - Ensayos Sobre Política Económica, Banco de la República, vol. 14(28), pages 139-188, December.
    9. Ramon E. Lopez, 1980. "The Structure of Production and the Derived Demand for Inputs in Canadian Agriculture," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 62(1), pages 38-45.
    10. Eduardo Lora Torres & Marta Luz Henao, 1995. "Efectos económicos y sociales de la legislación laboral," Coyuntura Social 13217, Fedesarrollo.
    11. J. R. Hicks, 1963. "The Theory of Wages," Palgrave Macmillan Books, Palgrave Macmillan, number 978-1-349-00189-7, December.
    12. Bentolila, Samuel & Saint-Paul, Gilles, 1992. "The macroeconomic impact of flexible labor contracts, with an application to Spain," European Economic Review, Elsevier, vol. 36(5), pages 1013-1047, June.
    13. Eduardo Lora & Carmen Pagés-Serra, 1997. "La legislación laboral en el proceso de reformas estructurales de América Latina y el Caribe," Research Department Publications 4065, Inter-American Development Bank, Research Department.
    14. Matthew J. Slaughter, 1997. "International Trade and Labor-Demand Elasticities," NBER Working Papers 6262, National Bureau of Economic Research, Inc.
    15. Mauricio Cárdenas S. & Mauricio Olivera G., 1995. "La Crítica de Lucas y la inversión en Colombia: Nueva Evidencia," Revista ESPE - Ensayos sobre Política Económica, Banco de la Republica de Colombia, vol. 14(27), pages 95-138, June.
    16. repec:bla:econom:v:63:y:1996:i:251:p:359-67 is not listed on IDEAS
    17. Diewert, W E, 1971. "An Application of the Shephard Duality Theorem: A Generalized Leontief Production Function," Journal of Political Economy, University of Chicago Press, vol. 79(3), pages 481-507, May-June.
    18. repec:bla:scandj:v:92:y:1990:i:2:p:215-35 is not listed on IDEAS
    19. Blanchflower, David G & Oswald, Andrew J, 1994. "Estimating a Wage Curve for Britain: 1973-90," Economic Journal, Royal Economic Society, vol. 104(426), pages 1025-1043, September.
    20. Newell, A. & Symons, J. S. V., 1987. "Corporatism, laissez-faire and the rise in unemployment," European Economic Review, Elsevier, vol. 31(3), pages 567-601, April.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Jaime Saavedra-Chanduví & Máximo Torero, 2000. "Labor Market Reforms and Their Impact on Formal Labor Demand and Job Market Turnover: The Case of Peru," Research Department Publications 3095, Inter-American Development Bank, Research Department.
    2. Kugler, Adriana, 2000. "The Incidence of Job Security Regulations on Labor Market Flexibility and Compliance in Colombia: Evidence from the 1990 Reform," IDB Publications (Working Papers) 3267, Inter-American Development Bank.
    3. Jaime Saavedra Chanduví & Eduardo Maruyama Sasaki, 2000. "Estabilidad laboral e indemnización: efectos de los costos de despido sobre el funcionamiento del mercado laboral peruano," Documentos de Investigación dt28, Grupo de Análisis para el Desarrollo (GRADE).
    4. Fredrik Carlsen & Kåre Johansen & Knut RØed, 2006. "Wage Formation, Regional Migration and Local Labour Market Tightness," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 68(4), pages 423-444, August.
    5. Yusuf Soner Baskaya & Timur Hulagu, 2011. "Informal-Formal Worker Wage Gap in Turkey : Evidence From A Semi-Parametric Approach," Working Papers 1115, Research and Monetary Policy Department, Central Bank of the Republic of Turkey.
    6. 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.
    7. Turner, Karen, 2009. "Negative rebound and disinvestment effects in response to an improvement in energy efficiency in the UK economy," Energy Economics, Elsevier, vol. 31(5), pages 648-666, September.
    8. Alfonso Arpaia & Giuseppe Carone, 2004. "Do labour taxes (and their composition) affect wages in the short and in the long run?," Public Economics 0411004, University Library of Munich, Germany.
    9. repec:spo:wpmain:info:hdl:2441/1cpd872l2j8lb968d53pu5f30q is not listed on IDEAS
    10. Iara, Anna & Traistaru, Iulia, 2004. "How flexible are wages in EU accession countries?," Labour Economics, Elsevier, vol. 11(4), pages 431-450, August.
    11. Mark Partridge & Dan Rickman, 2010. "Computable General Equilibrium (CGE) Modelling for Regional Economic Development Analysis," Regional Studies, Taylor & Francis Journals, vol. 44(10), pages 1311-1328.
    12. Sergio Destefanis & Giovanni Pica, 2010. "It’s wages, it’s hours, it’s the Italian wage curve," CSEF Working Papers 247, Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy.
    13. Charles Brown & James L. Medoff, 2003. "Firm Age and Wages," Journal of Labor Economics, University of Chicago Press, vol. 21(3), pages 677-698, July.
    14. Frédéric Reynès, 2017. "The Cobb-Douglas function as a flexible function. Analysing the substitution between capital, labor and energy," Documents de Travail de l'OFCE 2017-12, Observatoire Francais des Conjonctures Economiques (OFCE).
    15. Andrew Benito & Ignacio Hernando, 2003. "Labour demand, flexible contracts and financial factors: new evidence from Spain," Working Papers 0312, Banco de España.
    16. Boeters, Stefan & Savard, Luc, 2011. "The labour market in CGE models," ZEW Discussion Papers 11-079, ZEW - Leibniz Centre for European Economic Research.
    17. Frédéric Reynès, 2011. "The cobb-douglas function as an approximation of other functions," Working Papers hal-01069515, HAL.
    18. Thomas Rutherford & Hannu Torma†, 2010. "Efficiency of Fiscal Measures in Preventing Out-migration from North Finland," Regional Studies, Taylor & Francis Journals, vol. 44(4), pages 465-475.
    19. Ulrich Zierahn, 2013. "Agglomeration, congestion, and regional unemployment disparities," The Annals of Regional Science, Springer;Western Regional Science Association, vol. 51(2), pages 435-457, October.
    20. David N. F. Bell & David G. Blanchflower, 2014. "Labor Market Slack in the United Kingdom," Working Paper Series WP14-2, Peterson Institute for International Economics.
    21. repec:spo:wpmain:info:hdl:2441/eu4vqp9ompqllr09i29kgilc0 is not listed on IDEAS
    22. Peter Nijkamp & Jacques Poot, 2005. "The Last Word on the Wage Curve?," Journal of Economic Surveys, Wiley Blackwell, vol. 19(3), pages 421-450, July.

    More about this item

    Keywords

    labor demand; non-wage labor costs; labor legislation;
    All these keywords.

    JEL classification:

    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:cid:wpfacu:72a. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chuck McKenney (email available below). General contact details of provider: https://edirc.repec.org/data/ciharus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.