Wage setting in the Colombian manufacturing industry
Agudelo, Sonia A. (Universitat Autònoma de Barcelona)
Sala Lorda, Hèctor (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.
Note: Número d'acord de subvenció MINECO/ECO2012-31081
Rights: Tots els drets reservats
Language: Anglès.
Series: Discussion paper (Institute for the Study of Labor) ; 8945
Document: workingPaper
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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Research literature > Working papers

 Record created 2019-03-07, last modified 2019-04-09

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