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Underemployment and Queues for Full Time Jobs: Evidence from Chile

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  • Daniel Jaar
  • Alejandro Gonzalez
  • Esteban Puentes

Abstract

This article develops a double selection model in order to test whether part-time workers are excluded from full time jobs (underemployed) or choose to put themselves into distinct labour market segments. Results show statistical support for both exclusion and self-selection in the labour market. Additionally, they suggest that underemployment is mostly driven by the structural heterogeneity of the Chilean economy with human capital variables playing a secondary role. Wage equations are estimated as to further characterize each group; they show that the same economic segments that hire more full time workers pay wage premiums, a result consistent with the hypothesis of structural heterogeneity.

Suggested Citation

  • Daniel Jaar & Alejandro Gonzalez & Esteban Puentes, 2016. "Underemployment and Queues for Full Time Jobs: Evidence from Chile," Working Papers wp432, University of Chile, Department of Economics.
    • Handle: RePEc:udc:wpaper:wp432
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    File URL: http://www.econ.uchile.cl/uploads/publicacion/479070fd2967f4f9644f023db9198c68ee7b5689.pdf
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    References listed on IDEAS

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    1. Green, Francis & Weisskopf, Thomas E, 1990. "The Worker Discipline Effect: A Disaggregative Analysis," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 241-249, May.
    2. Van de Ven, Wynand P. M. M. & Van Praag, Bernard M. S., 1981. "The demand for deductibles in private health insurance : A probit model with sample selection," Journal of Econometrics, Elsevier, vol. 17(2), pages 229-252, November.
    3. Heckman, James, 2013. "Sample selection bias as a specification error," Applied Econometrics, Russian Presidential Academy of National Economy and Public Administration (RANEPA), vol. 31(3), pages 129-137.
    4. Esteban Puentes & Dante Contreras & Claudia Sanhueza, 2007. "Self-Employment in Chile, long run trends and education and age structures changes," Estudios de Economia, University of Chile, Department of Economics, vol. 34(2 Year 20), pages 203-247, December.
    5. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    6. Heckman, James J & Sedlacek, Guilherme, 1985. "Heterogeneity, Aggregation, and Market Wage Functions: An Empirical Model of Self-selection in the Labor Market," Journal of Political Economy, University of Chicago Press, vol. 93(6), pages 1077-1125, December.
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    Cited by:

    1. Gabriel Rodríguez-Puello & Ariel Arcos & Benjamin Jara, 2022. "Would you Value a few More Hours of work? Underemployment and Subjective Well-Being Across Chilean Workers," Applied Research in Quality of Life, Springer;International Society for Quality-of-Life Studies, vol. 17(2), pages 885-912, April.

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