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An estimation of the wage curve for Uruguay

Author

Listed:
  • 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)

Abstract

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.

Suggested Citation

  • Marisa Bucheli & Cecilia González, 2007. "An estimation of the wage curve for Uruguay," Documentos de Trabajo (working papers) 1107, Department of Economics - dECON.
    • Handle: RePEc:ude:wpaper:1107
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    File URL: https://hdl.handle.net/20.500.12008/2078
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    References listed on IDEAS

    as
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    Citations

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    Cited by:

    1. Cecilia Llambi & Silvia Laens & Marcelo Perera & Mery Ferrando, 2011. "Assessing the Impact of the 2007 Tax Reform on Povert and Inequality in Uruguay," Working Papers PMMA 2011-14, PEP-PMMA.
    2. Becker, Dennis, 2014. "Heterogeneous Firms and Informality: The Effects of Trade Liberalization on Labor Markets," Working Papers 180124, Cornell University, Department of Applied Economics and Management.
    3. Ramos, Raul & Duque, Juan C. & Surinach, Jordi, 2010. "Is the wage curve formal or informal? Evidence for Colombia," Economics Letters, Elsevier, vol. 109(2), pages 63-65, November.
    4. Carmen Estrades & Cecilia Llambi, 2011. "Assessing the Impact of the Global Financial and Economic Crisis in Developing Countries: the Case of Uruguay," Working Papers MPIA 2011-16, PEP-MPIA.
    5. Badi H. Baltagi & Bartlomiej Rokicki & Kênia Barreiro Souza, 2017. "The Brazilian wage curve: new evidence from the National Household Survey," Empirical Economics, Springer, vol. 53(1), pages 267-286, August.
    6. Inés Terra & Marisa Bucheli & Carmen Estrades, 2007. "Trade Openness and Gender in Uruguay: a CGE Analysis," Documentos de Trabajo (working papers) 2407, Department of Economics - dECON.
    7. Taiwo Aderemi, 2015. "Does the wage curve exist in Nigeria? Evidence from a disaggregated labour market," Journal of Social and Economic Development, Springer;Institute for Social and Economic Change, vol. 17(2), pages 184-199, October.
    8. Dennis Becker, 2018. "Heterogeneous firms and informality: the effects of trade liberalization on labour markets," Oxford Economic Papers, Oxford University Press, vol. 70(1), pages 47-72.
    9. Carmen Estrades & Cecilia Llambí, 2013. "Lessons from the 2008 Financial Crisis: Policy Responses to External Shocks in Uruguay," The Developing Economies, Institute of Developing Economies, vol. 51(3), pages 233-259, September.

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    More about this item

    Keywords

    wage curve; unemployment;

    JEL classification:

    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J60 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - General

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