Wage setting in the Colombian manufacturing industry
Agudelo Ayala, Sonia Alexandra (Universitat Autònoma de Barcelona)
Sala Lorda, Hector (Universitat Autònoma de Barcelona)

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
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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

Adreça alternativa: https://www.iza.org/publications/dp/8945/wage-setting-in-the-colombian-manufacturing-industry

36 p, 369.7 KB

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