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An approximation to the Informal-formal wage gap in Colombia 2008-2012

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  • Nancy Daza
  • Luis Fernando Gamboa

Abstract

This document provides recent evidence about the persistency of wage gaps between formal and informal workers in Colombia by using a non-parametric method proposed by Nopo (2008a). Over a rich dataset at a household level during 2008-2012, it is found that formal workers earn between 30 to 60 percent more, on average, than informal workers. Despite of the formality definition - structuralist or institucionalist- adopted, it is clear that formal workers have more economic advantages than informal ones, but after controlling by demographic and labor variables an important fraction of the gap still remains unexplained.

Suggested Citation

  • Nancy Daza & Luis Fernando Gamboa, 2013. "An approximation to the Informal-formal wage gap in Colombia 2008-2012," Documentos de Trabajo 10990, Universidad del Rosario.
    • Handle: RePEc:col:000092:010990
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    File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10947/10990.pdf
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    References listed on IDEAS

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    2. Duman, Anil, 2024. "The Diversity of Informal Employment: a survey of drivers, outcomes, and policies," OSF Preprints yg3t7, Center for Open Science.
    3. Duman, Anil & Duman, Alper, 2021. "The More the Gloomier: development of informal employment and its effect on wages in Turkey," GLO Discussion Paper Series 870, Global Labor Organization (GLO).
    4. Moreno-Monroy, Ana I. & Posada, Héctor M., 2018. "The effect of commuting costs and transport subsidies on informality rates," Journal of Development Economics, Elsevier, vol. 130(C), pages 99-112.
    5. Gustavo A. García, 2017. "Labor Informality: Choice or Sign of Segmentation? A Quantile Regression Approach at the Regional Level for Colombia," Review of Development Economics, Wiley Blackwell, vol. 21(4), pages 985-1017, November.
    6. Duman, Anil, 2020. "Pay Gaps and Mobility for Lower and Upper Tier Informal Sector Employees: an investigation of the Turkish labor market," GLO Discussion Paper Series 655, Global Labor Organization (GLO).

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    More about this item

    Keywords

    Wage gaps; non-parametric; Colombia; informality;
    All these keywords.

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • C14 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - Semiparametric and Nonparametric Methods: General
    • O17 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Formal and Informal Sectors; Shadow Economy; Institutional Arrangements

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