Informal-formal wage gaps in Colombia

Nancy Daza Báez and Luis Gamboa

No 301, Working Papers from ECINEQ, Society for the Study of Economic Inequality

Abstract: This document provides recent evidence about the persistency of wage gaps between formal and informal workers in Colombia. The methodology is based on a non-parametric procedure proposed by Nopo (2008a) that allows us to compare labor incomes using matching on variables over a Nationwide Household Survey during 2008-2012. It is found that formal workers earn between 30 to 60 percent more, on average, than informal workers according to the definition of formality adopted and small variations occurs along this period. This is new evidence about the true differences in labor compensation from workers with distinct formality levels in Colombia. These results are important inputs for labor policy in a country with high income inequality levels.

Keywords: Wage gaps; non-parametric; Colombia; informality. (search for similar items in EconPapers)
JEL-codes: C14 J31 O17 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2013-08
New Economics Papers: this item is included in nep-dev, nep-iue and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:inq:inqwps:ecineq2013-301

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