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An estimation of the wage curve for Uruguay

  • Marisa Bucheli

    ()

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

  • Cecilia González

    ()

    (Departamento de Economía, Facultad de Ciencias Sociales, Universidad de la República)

This paper analyzes the existence of a wage curve in Uruguay. We run several models using data for the period 1986-2005. We use two different proxies of the wage and we estimate both microdata and cell-mean regressions. Besides, we run the model for the whole sample and for groups of individuals disaggregated by level of education, gender, age and occupation. The results are consistent with the range of values found in similar studies for other countries. We find a negative relation between unemployment and wages. Specifically, we obtain an elasticity of -0.09. We find a higher elasticity for the youth, women and less educated workers. We also obtain difference results when disaggregating by occupation and formality. The results suggest that an increase of unemployment pushes up informality and self-employment which lead to a depression of earnings in these sectors. Thus, informality and self-employment would act as a buffer for unemployed formal wage earners.

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File URL: http://decon.edu.uy/publica/2007/1107.pdf
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Paper provided by Department of Economics - dECON in its series Documentos de Trabajo (working papers) with number 1107.

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Length: 21 pages
Date of creation: Oct 2007
Date of revision:
Handle: RePEc:ude:wpaper:1107
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  1. Ramos, Raul & Duque, Juan Carlos & Surinach, Jordi, 2009. "Is the Wage Curve Formal or Informal? Evidence for Colombia," IZA Discussion Papers 4461, Institute for the Study of Labor (IZA).
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  3. Barth, Erling & Bratsberg, Bernt & Naylor, Robin A. & Raaum, Oddbjørn, 2002. "Explaining Variations in Wage Curves: Theory and Evidence," Memorandum 03/2002, Oslo University, Department of Economics.
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  7. Baltagi, Badi H. & Blien, Uwe & Wolf, Katja, 2000. "The East German wage curve 1993-1998," Economics Letters, Elsevier, vol. 69(1), pages 25-31, October.
  8. Julio de Brun & Gastón J. Labadie, 1998. "Rigidez Salarial, Precios Relativos y Ajuste Estructural: Una Interpretación del Desempleo en Uruguay," IDB Publications (Working Papers) 7630, Inter-American Development Bank.
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  13. Peter Nijkamp & Jacques Poot, 2002. "The Last Word on the Wage Curve?," Tinbergen Institute Discussion Papers 02-029/3, Tinbergen Institute, revised 13 Mar 2003.
  14. Daniel Miles & Máximo Rossi, 2001. "Wage Inequality in Developing Countries: Market Forces or Government Intervention," Documentos de Trabajo (working papers) 1001, Department of Economics - dECON.
  15. Blanchflower, David G., 2001. "Unemployment, Well-Being, and Wage Curves in Eastern and Central Europe," Journal of the Japanese and International Economies, Elsevier, vol. 15(4), pages 364-402, December.
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  17. David G. Blanchflower & Andrew J. Oswald, 1995. "An Introduction to the Wage Curve," Journal of Economic Perspectives, American Economic Association, vol. 9(3), pages 153-167, Summer.
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  19. Esteban Sanroma Melendez & Raul Ramos Lobo, 2003. "Wage curves for Spain. Evidence from the family budget survey," Working Papers in Economics 101, Universitat de Barcelona. Espai de Recerca en Economia.
  20. Ipek Ilkkaracan & Raziye Selim, 2003. "The role of unemployment in wage determination: further evidence on the wage curve from Turkey," Applied Economics, Taylor & Francis Journals, vol. 35(14), pages 1589-1598.
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