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Informal-formal wage gaps in Colombia

  • Nancy Daza

    ()

    (National Planning Department (DNP), Colombia)

  • Luis Fernando Gamboa

    ()

    (Department of Economics, Universidad del Rosario, Colombia)

This document provides recent evidence about the persistency of wage gaps between formal and informal workers in Colombia. The methodology is based on a non-parametric procedure proposed by Nopo (2008a) that allows us to compare labor incomes using matching on variables over a Nationwide Household Survey during 2008-2012. It is found that formal workers earn between 30 to 60 percent more, on average, than informal workers according to the definition of formality adopted and small variations occurs along this period. This is new evidence about the true differences in labor compensation from workers with distinct formality levels in Colombia. These results are important inputs for labor policy in a country with high income inequality levels.

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File URL: http://www.ecineq.org/milano/WP/ECINEQ2013-301.pdf
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Paper provided by ECINEQ, Society for the Study of Economic Inequality in its series Working Papers with number 301.

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Length: 33 pages
Date of creation: Aug 2013
Date of revision:
Handle: RePEc:inq:inqwps:ecineq2013-301
Contact details of provider: Web page: http://www.ecineq.org
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  1. 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.
  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. Alejandro Badel & Ximena Peña, 2010. "Decomposing the gender wage gap with sample selection adjustment: evidence from Colombia," Working Papers 2010-045, Federal Reserve Bank of St. Louis.
  4. 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.
  5. 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.
  6. Pradhan, M.P. & van Soest, A.H.O., 1993. "Formal and informal sector employment in urban areas of Bolivia," Discussion Paper 1993-11, Tilburg University, Center for Economic Research.
  7. 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 006286, BANCO DE LA REPÚBLICA.
  8. 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.
  9. 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.
  10. Luis Fernando Gamboa & Blanca Zuluaga, 2011. "Is there a motherhood penalty? Decomposing the family wage gap in Colombia," Working Papers 220, ECINEQ, Society for the Study of Economic Inequality.
  11. Nopo, Hugo, 2004. "Matching as a Tool to Decompose Wage Gaps," IZA Discussion Papers 981, Institute for the Study of Labor (IZA).
  12. Maloney, William, 2003. "Informality revisited," Policy Research Working Paper Series 2965, The World Bank.
  13. Luis Armando Galvis A., 2012. "Informalidad laboral en las áreas urbanas de Colombia," COYUNTURA ECONÓMICA, FEDESARROLLO.
  14. 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.
  15. 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.
  16. Hugo Ñopo & Nancy Daza & Johanna Ramos, 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, March.
  17. Mazumdar, Dipak, 1976. "The Rural-Urban Wage Gap, Migration, and the Shadow Wage," Oxford Economic Papers, Oxford University Press, vol. 28(3), pages 406-25, November.
  18. Bernal Raquel, 2009. "The Informal Labor Market in Colombia: identification and characterization," REVISTA DESARROLLO Y SOCIEDAD, UNIVERSIDAD DE LOS ANDES-CEDE.
  19. 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.
  20. Jacob A. Mincer, 1974. "Schooling, Experience, and Earnings," NBER Books, National Bureau of Economic Research, Inc, number minc74-1, May.
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