Regional wage gaps, education, and informality in an emerging country. The case of Colombia

Paula Herrera-Idárraga (), Enrique Lopez-Bazo and Elisabet Motellón ()
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Paula Herrera-Idárraga: Department of Econometrics. University of Barcelona
Elisabet Motellón: Department of Econometrics. University of Barcelona

No 201507, AQR Working Papers from University of Barcelona, Regional Quantitative Analysis Group

Abstract: This paper uses Colombian micro-data to analyze the role of education and informality on regional wage differentials. Our hypothesis is that apart from differences in the endowment of human capital across regions, regional heterogeneity in the incidence of informality is another important source of regional wage inequality in developing and emerging countries. This is confirmed by the evidence from Colombia, which in addition reveals remarkable heterogeneity across territories in the wage return to individuals’ characteristics. Regional heterogeneity in returns to education is especially intense in the upper part of the wage distribution. In turn, heterogeneity in the informal pay penalty is more relevant in the lower part.

Keywords: Regions; Wage differentials; Quantile-based decompositions; Formal/Informal Jobs; Economic Development JEL classification: C21; J31; J38 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2015-01, Revised 2015-01
New Economics Papers: this item is included in nep-dem, nep-geo, nep-iue, nep-lma and nep-ure
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http://www.ub.edu/irea/working_papers/2015/201509.pdf (application/pdf)

Related works:
Journal Article: Regional Wage Gaps, Education and Informality in an Emerging Country: The Case of Colombia (2016)
Working Paper: Regional wage gaps, education, and informality in an emerging country. The case of Colombia (2015)
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Persistent link: https://EconPapers.repec.org/RePEc:aqr:wpaper:201507

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