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Skill Premium, Labor Supply and Changes in the Structure of Wages in Latin America

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  • Manuel Fernández
  • Julián Messina

Abstract

Earnings inequality declined rapidly in Argentina, Brazil and Chile during the 2000s. A reduction in the experience premium is a fundamental driver of declines in upper-tail (90/50) inequality, while a decline in the education premium is the primary determinant of the evolution of lower-tail (50/10) inequality. Relative labor supply is important for explaining changes in the skill premiums. Relative demand trends favored high-skilled workers during the 1990s, shifting in favor of low-skilled workers during the 2000s. Changes in the minimum wage, and more importantly, commodity-led terms of trade improvements are key factors behind these relative skill demand trends.

Suggested Citation

  • Manuel Fernández & Julián Messina, 2017. "Skill Premium, Labor Supply and Changes in the Structure of Wages in Latin America," IDB Publications (Working Papers) 8219, Inter-American Development Bank.
  • Handle: RePEc:idb:brikps:8219
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    References listed on IDEAS

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    Cited by:

    1. Bhalotra, Sonia R. & Fernandez Sierra, Manuel, 2018. "The Distribution of the Gender Wage Gap," IZA Discussion Papers 11640, Institute for the Study of Labor (IZA).
    2. Canavire Bacarreza, Gustavo J & Carvajal-Osorio, Luis C., 2018. "Two Stories of Wage Dynamics in Latin America: Different Policies, Different Outcomes," IZA Discussion Papers 11584, Institute for the Study of Labor (IZA).
    3. repec:wbk:wbpubs:28682 is not listed on IDEAS

    More about this item

    Keywords

    Wage Gap; Income Inequality; Minimum Wage; Labor Productivity Growth; Labor supply; Labor Force; Unemployment Rate; Commodity Prices; Human Capital; Female Labor Force Participation; Unemployment; labor supply; Wage Gap; Minimun wage;

    JEL classification:

    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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