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Explicando la brecha entre el salario real y la productividad laboral en la República Dominicana: Análisis macroeconómico y recomendaciones de políticas basadas en microsimulaciones
[Explaining the Gap Between Real Earnings and Labor Productivity in the Dominican Republic: Macroeconomic Analysis and Policy Recommendations based on Microsimulations]

Author

Listed:
  • Jiménez Polanco, Miguel Alejandro
  • López Hawa, Nabil

Abstract

This paper addresses the determinants and causes of the gap between real earnings and labor productivity in the Dominican Republic, using data from the National Labor Force Survey. Our estimates indicate that the main determinants of the gap between real earnings and labor productivity are the bargaining power of workers, the downward pressure the Dominican Republic receives from lower-wages exporting countries, and the level of education of the working population. Likewise, in order to evaluate possible solutions to close the real earnings-labor productivity gap, we run micro-simulations, in order to evaluate the impact of four specific public policies would have on real earnings: firstly, an increasing the formality rate of employment; secondly, an increase the bargaining power of employees; thirdly, an increase of higher education; and finally, an increase of vocational education in the working population. Our results suggest that increasing both the scope of higher education and vocational education, as well as increasing the bargaining power of the working population, would translate into gains in terms of real wages that would help to close the gap between real earnings and labor productivity.

Suggested Citation

  • Jiménez Polanco, Miguel Alejandro & López Hawa, Nabil, 2017. "Explicando la brecha entre el salario real y la productividad laboral en la República Dominicana: Análisis macroeconómico y recomendaciones de políticas basadas en microsimulaciones [Explaining the," MPRA Paper 83441, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:83441
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    References listed on IDEAS

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    Cited by:

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    More about this item

    Keywords

    Labor productivity; real earnings; labor markets; simulations; bargain power; education; Dominican Republic;
    All these keywords.

    JEL classification:

    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • J08 - Labor and Demographic Economics - - General - - - Labor Economics Policies
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

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