Estabilidad de la demanda de trabajo y efecto del salario minimo sobre el Empleo: El caso Chileno
[Labor demand stability and the minimum wage effect on employment: the Chilean evidence]
The ability of the economy to create jobs through economic growth, it is essential to improve social welfare. It has been argued that the persistence of unemployment in Chile post Asian crisis was mainly due to two factors: First, to a loss of employment generating capacity, expressed in a fall in the employment-PGB elasticity of the economy. Second, a strong negative effect of minimum wage increases in the late nineties. The first hypothesis is not supported empirically, except the work of Martinez et al (2001) who find an unknown break in the demand for labor in 2001. The second scenario presents mixed evidence. In this paper I attempt to answer both questions using an alternative methodology for the estimation of multiple breaks (Bai and Perron, 2003) in the presence of cointegration relationships (Kejriwal, 2008). The results show evidence of a structural break in the labor demand around the year 2001. The break is mainly characterized by an increase in employment-PGB elasticity. Additionally, separating labor demand by sector, find evidence of a stronger negative impact of minimum wages on employment in the tradable sector, in the late nineties. The minimum wage increases 10% above the average wage in the economy destroyed by 3.6% of jobs in the tradable sector of the economy. These results highlight the importance of the economic growth on employment generation as well as the risk of not considering the economic cycle when it legislated minimum wage increases
|Date of creation:||30 Apr 2013|
|Contact details of provider:|| Postal: Ludwigstraße 33, D-80539 Munich, Germany|
Web page: https://mpra.ub.uni-muenchen.de
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Mohitosh Kejriwal & Pierre Perron, 2008.
"Testing for Multiple Structural Changes in Cointegrated Regression Models,"
Purdue University Economics Working Papers
1216, Purdue University, Department of Economics.
- Kejriwal, Mohitosh & Perron, Pierre, 2010. "Testing for Multiple Structural Changes in Cointegrated Regression Models," Journal of Business & Economic Statistics, American Statistical Association, vol. 28(4), pages 503-522.
- Mohitosh Kejriwal & Pierre Perron, 2007. "Testing for Multiple Structural Changes in Cointegrated Regression Models," Boston University - Department of Economics - Working Papers Series wp2008-020, Boston University - Department of Economics, revised Nov 2008.
- Mohitosh Kejriwal & Pierre Perron, 2006. "Testing for Multiple Structural Changes in Cointegrated Regression Models," Boston University - Department of Economics - Working Papers Series WP2006-051, Boston University - Department of Economics.
- Kejriwal Mohitosh, 2008.
"Cointegration with Structural Breaks: An Application to the Feldstein-Horioka Puzzle,"
Studies in Nonlinear Dynamics & Econometrics,
De Gruyter, vol. 12(1), pages 1-39, March.
- Mohitosh Kejriwal & Pierre Perron, 2007. "Cointegration with Structural Breaks : An Application to the Feldstein-Horioka Puzzle," Boston University - Department of Economics - Working Papers Series WP2006-057, Boston University - Department of Economics.
- Perron, P. & Bai, J., 1995.
"Estimating and Testing Linear Models with Multiple Structural Changes,"
Cahiers de recherche
9552, Centre interuniversitaire de recherche en économie quantitative, CIREQ.
- Jushan Bai & Pierre Perron, 1998. "Estimating and Testing Linear Models with Multiple Structural Changes," Econometrica, Econometric Society, vol. 66(1), pages 47-78, January.
- Perron, P. & Bai, J., 1995. "Estimating and Testing Linear Models with Multiple Structural Changes," Cahiers de recherche 9552, Universite de Montreal, Departement de sciences economiques.
When requesting a correction, please mention this item's handle: RePEc:pra:mprapa:46637. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Joachim Winter)
If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.
If references are entirely missing, you can add them using this form.
If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.
If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.
Please note that corrections may take a couple of weeks to filter through the various RePEc services.