Vista Equipo: Labor market rigidities and informality in Colombia

Labor market rigidities and informality in Colombia

Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sec...

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Detalles Bibliográficos
Autores Principales:	Mondragón-Vélez, Camilo Hernán, Peña Parga, Ximena, Wills Restrepo, Daniel Santiago
Formato:	Desconocido (Unknown)
Lenguaje:	Inglés (English)
Publicado:	Universidad de los Andes, Facultad de Economía, CEDE 2018
Materias:	Informality Non-wage costs Minimum wage Transition probability Economía informal - Colombia - Métodos estadísticos Trabajadores independientes - Colombia - Métodos estadísticos Salarios - Colombia - Métodos estadísticos Economía del trabajo - Colombia J31, J32, J38
Acceso en línea:	http://hdl.handle.net/1992/8153

id	ir-1992-8153
recordtype	dspace
spelling	ir-1992-81532020-09-16T20:19:55Z Labor market rigidities and informality in Colombia Rigideces en el mercado laboral e informalidad en Colombia Mondragón-Vélez, Camilo Hernán Peña Parga, Ximena Wills Restrepo, Daniel Santiago Informality Non-wage costs Minimum wage Transition probability Economía informal - Colombia - Métodos estadísticos Trabajadores independientes - Colombia - Métodos estadísticos Salarios - Colombia - Métodos estadísticos Economía del trabajo - Colombia J31, J32, J38 Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sector, the transition into and out of informality, and wages. Our results indicate that rises in non-wage costs and the minimum wage, increase the probability of transition into informality as well as the size of the informal sector. The analysis of these effects along the income distribution points towards strong exclusion motives for low skilled informal workers, mainly driven by labor demand adjustments in response to increasing hiring costs; and argues somehow in favor of exit motives for workers at the top of the wage distribution. Furthermore, there is strong indexation of salaries to the minimum wage, except for low skilled informal workers. In addition, firms adjust salaries in response to increasing non-wage costs for all workers within the labor force. Los altos niveles de informalidad y su aumento durante la década de los noventa han estado en el centro del debate económico en Colombia. Este documento estudia el efecto de las rigideces del mercado laboral, es decir, del aumento en los costos no salariales y el salario mínimo, en el tamaño del sector informal, las transiciones entre los sectores formal e informal y los salarios. Los resultados sugieren que aumentos en los costos no salariales y el salario mínimo aumentan tanto el tamaño del sector informal como la probabilidad de que los trabajadores hagan la transición al mismo. El análisis de estos efectos a lo largo de la distribución salarial sugiere que los trabajadores informales de baja calificación están excluidos del sector formal, debido a los ajustes de la demanda laboral al aumento en los costos de contratación; mientras que pareciera que los trabajadores de altos ingresos eligen volverse informales. Además, la distribución salarial está fuertemente indizada al salario mínimo, excepto para los trabajadores formales de baja calificación. Las firmas ajustan los salarios que pagan a todos los trabajadores ante aumentos de los costos no salariales. 2018-09-27T16:50:54Z 2018-09-27T16:50:54Z 2010 document publishedVersion 1657-5334 http://hdl.handle.net/1992/8153 1657-7191 eng Documentos CEDE No. 07 Febrero de 2010 Al consultar y hacer uso de este recurso, está aceptando las condiciones de uso establecidas por los autores. openAccess Universidad de los Andes, Facultad de Economía, CEDE instname:Universidad de los Andes reponame:Repositorio Institucional Séneca
institution	Universidad de los Andes
collection	DSpace
language	Inglés (English)
topic	Informality Non-wage costs Minimum wage Transition probability Economía informal - Colombia - Métodos estadísticos Trabajadores independientes - Colombia - Métodos estadísticos Salarios - Colombia - Métodos estadísticos Economía del trabajo - Colombia J31, J32, J38
spellingShingle	Informality Non-wage costs Minimum wage Transition probability Economía informal - Colombia - Métodos estadísticos Trabajadores independientes - Colombia - Métodos estadísticos Salarios - Colombia - Métodos estadísticos Economía del trabajo - Colombia J31, J32, J38 Mondragón-Vélez, Camilo Hernán Peña Parga, Ximena Wills Restrepo, Daniel Santiago Labor market rigidities and informality in Colombia
description	Informality is at the center of the economic debate in Colombia, fueled by the high level prevalent in the country and its substantial increase during the 1990s. We study the effect of labor market rigidities, namely the increase in non-wage costs and the minimum wage on the size of the informal sector, the transition into and out of informality, and wages. Our results indicate that rises in non-wage costs and the minimum wage, increase the probability of transition into informality as well as the size of the informal sector. The analysis of these effects along the income distribution points towards strong exclusion motives for low skilled informal workers, mainly driven by labor demand adjustments in response to increasing hiring costs; and argues somehow in favor of exit motives for workers at the top of the wage distribution. Furthermore, there is strong indexation of salaries to the minimum wage, except for low skilled informal workers. In addition, firms adjust salaries in response to increasing non-wage costs for all workers within the labor force.
format	Desconocido (Unknown)
author	Mondragón-Vélez, Camilo Hernán Peña Parga, Ximena Wills Restrepo, Daniel Santiago
author_facet	Mondragón-Vélez, Camilo Hernán Peña Parga, Ximena Wills Restrepo, Daniel Santiago
author_sort	Mondragón-Vélez, Camilo Hernán
title	Labor market rigidities and informality in Colombia
title_short	Labor market rigidities and informality in Colombia
title_full	Labor market rigidities and informality in Colombia
title_fullStr	Labor market rigidities and informality in Colombia
title_full_unstemmed	Labor market rigidities and informality in Colombia
title_sort	labor market rigidities and informality in colombia
publisher	Universidad de los Andes, Facultad de Economía, CEDE
publishDate	2018
url	http://hdl.handle.net/1992/8153
_version_	1705932562519556096
score	12,131701

Labor market rigidities and informality in Colombia

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