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Chilean labor market efficiency: an earning frontier approach

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  • Sergio Salas Landeau
  • Dante Contreras

Abstract

In this paper, we use the econometric frontier approach to estimate efficiency measures of the transformation of human capital into earned income in the Chilean labor market for the period 1957-1998. We find that the mean efficiency is 75%, and that it has been imporving over time. We also find evidence of detrimental effects of non market oriented governments on these efficiency measures. Some evidence is also founded about the effects of health on efficiency, the existence of labor market segmentation and the importance of "social networks". Finally we calculate correlation measures and causality tests between the estimated efficiencies and the rate of growth of GDP, finding a statistical precedence of the later to the former. We give then an eppealing explanation for this results.

Suggested Citation

  • Sergio Salas Landeau & Dante Contreras, 2003. "Chilean labor market efficiency: an earning frontier approach," Estudios de Economia, University of Chile, Department of Economics, vol. 30(1 Year 20), pages 87-102, June.
    • Handle: RePEc:udc:esteco:v:30:y:2003:i:1:p:87-102
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    References listed on IDEAS

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    Cited by:

    1. Claudia Sanhueza & Rodrigo Bravo & Oscar Giusti, 2008. "La Belleza y su Efecto en el Mercado Laboral: Evidencia para Chile," ILADES-UAH Working Papers inv204, Universidad Alberto Hurtado/School of Economics and Business.
    2. Somnath Chattopadhyay, 2014. "Analysis Of Poverty And Efficiency: An Earnings Frontier Approach," Bulletin of Economic Research, Wiley Blackwell, vol. 66(2), pages 133-155, April.
    3. Joanna María Bashford-Fernández & Ana Rodríguez-Álvarez, 2019. "Wage Frontiers in Pre and Post-crisis Spain: Implications for Welfare and Inequality," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 143(2), pages 579-608, June.
    4. Yuxiang Xie & E. Xie, 2021. "Comparing Income Poverty with Multidimensional Well-being Based on the "Conversion Efficiency"," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 154(1), pages 61-77, February.

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    More about this item

    Keywords

    Efficiency; Labor; Frontier approach; Chilean labor market.;
    All these keywords.

    JEL classification:

    • I12 - Health, Education, and Welfare - - Health - - - Health Behavior
    • J0 - Labor and Demographic Economics - - General

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