Recent changes in wage inequality in Argentina. The role of labor formalization and other factors

Luis, Beccaria and Roxana, Maurizio and Vazquez, Gustavo (2014): Recent changes in wage inequality in Argentina. The role of labor formalization and other factors.

Abstract

In the last decade Argentina experienced a process of wage inequality reduction that is in stark contrast with the trends of the previous decade. The purpose of this study is to analyze the contribution of different factors to this process. The method employed is a decomposition proposed by Firpo, Fortin and Lemieux (2007, 2011), which allows extending the Oaxaca-Blinder approach to decompose some distributive statistics of income between a ‘composition effect’ and a ‘returns effect’. Similar to other studies, the results reveal that declining returns to education have been a major factor explaining the improvement in the distribution of income observed in the 2003-2012 period. However, the process of labor formalization has also had an equalizing effect over the period.

• Item Type: MPRA Paper
• Language: English
• Keywords: Inequality, labor formalization, Oaxaca-Blinder, decomposition methods.
• Subjects: D - Microeconomics > D3 - Distribution > D31 - Personal Income, Wealth, and Their Distributions; J - Labor and Demographic Economics > J3 - Wages, Compensation, and Labor Costs > J31 - Wage Level and Structure ; Wage Differentials

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