Labor Costs, Non-Labor Costs and Their Impact on Unemployment, Unemployment Duration and Informality in Colombia, 1980-2007 (Costos Laborales y no Laborales y su Impacto Sobre el Desempleo, la Duración del Desempleo y la Informalidad en Colombia, 1980-2007) (Spanish)
68 Pages Posted: 10 Oct 2009
Date Written: April 9, 2009
This document offers a long-run overview of the labor market in Colombia analyzing the effects of payroll taxes and minimum wage on the unemployment rate, unemployment duration and labor informality. The estimations indicate that the increase of payroll tax generates a rise in informality, unemployment and its duration. It is shown that rise in nonlabor costs occurred since 1990s has augmented unemployment by 3.5 percentage points, informality by 5.3 points and unemployment duration by six weeks. Thus, this paper confirms what has been pointed out by other studies about the negative impact that have the rise of labor and non-labor costs on labor market outcomes.
Keywords: unemployment, informality, duration of unemployment, labor costs, minimum wage, payroll taxes
JEL Classification: H22, H30, H31, J32, J38
Suggested Citation: Suggested Citation