Home > Research literature > Working papers > Wage setting in the Colombian manufacturing industry |
Imprint: | Bonn Institute for the Study of Labor 2015 |
Description: | 36 pag. |
Abstract: | We show that wage setting in the Colombian manufacturing industry is not fundamentally driven by labor productivity in contrast to the standard theoretical prediction. On the contrary, internal institutional arrangements - payroll taxation,the minimum wage or the price wedge between manufacturing and consumption prices - together with a higher exposure to international trade - connected to the increasing globalization of the Colombian economy - appear as the crucial drivers. These findings lead us to question the political strategy followed to attain cost competitiveness in a context of growing exposure to international trade. Implementation of a true wage bargaining system is suggested as a critical policy target to prevent the disruptive economic consequences of the current wage setting mechanism and help rebalance the trade deficit. |
Grants: | Ministerio de Economía y Competitividad ECO2012-31081 |
Rights: | Tots els drets reservats. |
Language: | Anglès |
Series: | Discussion paper (Institute for the Study of Labor) ; 8945 |
Document: | Working paper |
Subject: | Wage setting ; Labor productivity ; Trade openness ; Payroll taxes ; Minimum wages ; Price wedge |
36 p, 369.7 KB |