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

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Listed author(s):
  • Nancy Daza

    ()

  • Luis Fernando Gamboa

    ()

Abstract

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 Ñopo (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.

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File URL: http://repository.urosario.edu.co/bitstream/handle/10336/10947/10990.pdf
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Paper provided by UNIVERSIDAD DEL ROSARIO in its series DOCUMENTOS DE TRABAJO with number 010990.

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Length: 31
Date of creation: 03 Jun 2013
Handle: RePEc:col:000092:010990
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Keywords: Wage gaps; non-parametric; Colombia; informality;

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Find related papers by 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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  1. Pradhan, Menno & van Soest, Arthur, 1995. "Formal and informal sector employment in urban areas of Bolivia," Labour Economics, Elsevier, vol. 2(3), pages 275-297, September.
  2. Alejandro Hoyos & Hugo Ñopo & Ximena Peña, 2010. "The Persistent Gender Earnings Gap in Colombia, 1994-2006," DOCUMENTOS CEDE 007094, UNIVERSIDAD DE LOS ANDES-CEDE.
  3. Christian Manuel Posso, 2010. "Desigualdad salarial en Colombia 1984-2005: cambios en la composición del mercado laboral y retornos a la educación post-secundaria," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, December.
  4. Hugo Ñopo, 2008. "Matching as a Tool to Decompose Wage Gaps," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 290-299, May.
  5. Luis Armando Galvis A., 2012. "Informalidad laboral en las áreas urbanas de Colombia," COYUNTURA ECONÓMICA, FEDESARROLLO, June.
  6. Alejandro Badel & Ximena Peña, 2010. "Decomposing the Gender Wage Gap with Sample Selection Adjustment: Evidence from Colombia," Revista de Analisis Economico – Economic Analysis Review, Ilades-Georgetown University, Universidad Alberto Hurtado/School of Economics and Bussines, vol. 25(2), pages 169-191, Diciembre.
  7. Luis Eduardo Arango & Carlos Esteban Posada & José Darío Uribe, 2004. "Cambios en la Estructura de los Salarios Urbanos en Colombia (1984-2000)," BORRADORES DE ECONOMIA 002088, BANCO DE LA REPÚBLICA.
  8. Jacob A. Mincer, 1974. "Introduction to "Schooling, Experience, and Earnings"," NBER Chapters,in: Schooling, Experience, and Earnings, pages 1-4 National Bureau of Economic Research, Inc.
  9. Luis Gamboa & Blanca Zuluaga, 2013. "Is There a Motherhood Penalty? Decomposing the Family Wage Gap in Colombia," Journal of Family and Economic Issues, Springer, vol. 34(4), pages 421-434, December.
  10. Pratap, Sangeeta & Quintin, Erwan, 2006. "Are labor markets segmented in developing countries? A semiparametric approach," European Economic Review, Elsevier, vol. 50(7), pages 1817-1841, October.
  11. Oaxaca, Ronald, 1973. "Male-Female Wage Differentials in Urban Labor Markets," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 14(3), pages 693-709, October.
  12. José Ignacio Uribe & Carlos Humberto Ortiz & Gustavo Adolfo García, 2007. "La segmentación del mercado laboral colombiano en la década de los noventa," Revista de Economía Institucional, Universidad Externado de Colombia - Facultad de Economía, vol. 9(16), pages 189-221, January-J.
  13. Aysit Tansel, 1999. "Formal Versus Informal Sector Choice of Wage Earners and their Wages in Turkey," Working Papers 9927, Economic Research Forum, revised Sep 1999.
  14. Fiess, Norbert M. & Fugazza, Marco & Maloney, William F., 2010. "Informal self-employment and macroeconomic fluctuations," Journal of Development Economics, Elsevier, vol. 91(2), pages 211-226, March.
  15. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, June.
  16. Mazumdar, Dipak, 1976. "The Rural-Urban Wage Gap, Migration, and the Shadow Wage," Oxford Economic Papers, Oxford University Press, vol. 28(3), pages 406-425, November.
  17. Hugo Ñopo, 2012. "Gender earning gaps around the world: a study of 64 countries," International Journal of Manpower, Emerald Group Publishing, vol. 33(5), pages 464-513, August.
  18. Alan S. Blinder, 1973. "Wage Discrimination: Reduced Form and Structural Estimates," Journal of Human Resources, University of Wisconsin Press, vol. 8(4), pages 436-455.
  19. Bernal Raquel, 2009. "The Informal Labor Market in Colombia: identification and characterization," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE, September.
  20. Maloney, William F, 1999. "Does Informality Imply Segmentation in Urban Labor Markets? Evidence from Sectoral Transitions in Mexico," World Bank Economic Review, World Bank Group, vol. 13(2), pages 275-302, May.
  21. Aysit Tansel, 2001. "Wage Earners, Self Employed and Gender in the Informal Sector in Turkey," Working Papers 0102, Economic Research Forum, revised 01 Nov 2001.
  22. 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.
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