Recent Changes in Wage Inequality in Argentina. The Role of Labor Formalization and Other Factors

24 Pages Posted: 1 Dec 2014

See all articles by Luis Beccaria

Luis Beccaria

Universidad Nacional de General Sarmiento

Roxana Maurizio

Republic of Argentina - Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET)

Gustavo Vázquez

Universidad Nacional de General Sarmiento

Date Written: November 30, 2014

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.

Keywords: Inequality, labor formalization, Oaxaca-Blinder, decomposition methods

JEL Classification: D31, J31

Suggested Citation

Beccaria, Luis and Maurizio, Roxana and Vázquez, Gustavo, Recent Changes in Wage Inequality in Argentina. The Role of Labor Formalization and Other Factors (November 30, 2014). Available at SSRN: https://ssrn.com/abstract=2532222 or http://dx.doi.org/10.2139/ssrn.2532222

Luis Beccaria

Universidad Nacional de General Sarmiento ( email )

San Miguel, Provincia de Buenos Aires
Argentina

Roxana Maurizio (Contact Author)

Republic of Argentina - Consejo Nacional de Investigaciones Científicas y Técnicas (CONICET)

Avda. Rivadavia 1917
Buenos Aires, Federal Capital C1033AAJ
Argentina

Gustavo Vázquez

Universidad Nacional de General Sarmiento ( email )

San Miguel, Provincia de Buenos Aires
Argentina

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