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The Effects of Being Subject to the Colombian Apprenticeship Contract on Manufacturing Firm Performance

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  • Carlos Ospino

    (Universidad de los Andes)

Abstract

This paper evaluates the intent to treat local average treatment effects of the Colombian apprenticeship contract on manufacturing firm dynamics taking advantage of an exogenous variation generated by the 2002 labor reform and the regulation design. This evaluation is appealing because very little is known about the effects of apprenticeship policies on firm dynamics in developing countries. Moreover, although this regulation has been in place for years it has not been evaluated. Results using a regression discontinuity design which compares small firms subject to the regulation to those that are not, shows positive effects on output per worker (10 log points), total factor productivity (3 log points) and the share of exported sales (2 percentage points). It also shows a negative effect on the average wage bill of directly hired workers (9 log points). These results suggest that small firms which became subject to the regulation adjusted their labor force more efficiently, thus increasing productivity but did not share these gains with workers through higher wages.

Suggested Citation

  • Carlos Ospino, 2018. "The Effects of Being Subject to the Colombian Apprenticeship Contract on Manufacturing Firm Performance," CEDLAS, Working Papers 0230, CEDLAS, Universidad Nacional de La Plata.
  • Handle: RePEc:dls:wpaper:0230
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    File URL: http://www.cedlas.econo.unlp.edu.ar/wp/wp-content/uploads/doc_cedlas230.pdf
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    References listed on IDEAS

    as
    1. Mohrenweiser, Jens & Zwick, Thomas, 2009. "Why do firms train apprentices? The net cost puzzle reconsidered," Labour Economics, Elsevier, vol. 16(6), pages 631-637, December.
    2. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs In Economics," Working Papers 1118, Princeton University, Department of Economics, Industrial Relations Section..
    3. Nezih Guner & Gustavo Ventura & Xu Yi, 2008. "Macroeconomic Implications of Size-Dependent Policies," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(4), pages 721-744, October.
    4. David S. Lee & Thomas Lemieux, 2010. "Regression Discontinuity Designs in Economics," Journal of Economic Literature, American Economic Association, vol. 48(2), pages 281-355, June.
    5. Jozef Konings & Stijn Vanormelingen, 2015. "The Impact of Training on Productivity and Wages: Firm-Level Evidence," The Review of Economics and Statistics, MIT Press, vol. 97(2), pages 485-497, May.
    6. Imbens, Guido W. & Lemieux, Thomas, 2008. "Regression discontinuity designs: A guide to practice," Journal of Econometrics, Elsevier, vol. 142(2), pages 615-635, February.
    7. Andrew Gelman & Guido Imbens, 2019. "Why High-Order Polynomials Should Not Be Used in Regression Discontinuity Designs," Journal of Business & Economic Statistics, Taylor & Francis Journals, vol. 37(3), pages 447-456, July.
    8. McCrary, Justin, 2008. "Manipulation of the running variable in the regression discontinuity design: A density test," Journal of Econometrics, Elsevier, vol. 142(2), pages 698-714, February.
    9. Lee, David S. & Card, David, 2008. "Regression discontinuity inference with specification error," Journal of Econometrics, Elsevier, vol. 142(2), pages 655-674, February.
    10. Camilo Mondragón-Vélez & Ximena Peña & Daniel Wills, 2010. "Labor Market Rigidities and Informality in Colombia," Economía Journal, The Latin American and Caribbean Economic Association - LACEA, vol. 0(Fall 2010), pages 65-101, August.
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    Cited by:

    1. Santiago Caicedo & Arthur Seibold & Miguel Espinosa, 2019. "The Effects of Mandating Training in Firms: Theory and Evidence from the Colombian Apprenticeship Program," 2019 Meeting Papers 888, Society for Economic Dynamics.
    2. Santiago Caicedo & Miguel Espinosa & Arthur Seibold, 2020. "Unwilling to Train? Firm Responses to the Colombian Apprenticeship Regulation," CESifo Working Paper Series 8598, CESifo.

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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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