International Trade, Labor Flexibilization, and Wage Inequality: The Colombian Manufacturing Case

Hernández-Luna Yezid (), Salazar-Pérez Camila () and Herrera-Cuartas Jorge A. ()
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Hernández-Luna Yezid: Faculty of Economics and Administrative Sciences, Jorge Tadeo Lozano University, Carrera 4 # 22-61, Bogotá, Colombia
Salazar-Pérez Camila: Faculty of Economics and Administrative Sciences, Jorge Tadeo Lozano University, Carrera 4 # 22-61, Bogotá, Colombia
Herrera-Cuartas Jorge A.: Full Professor, Faculty of Natural Sciences and Engineering, Jorge Tadeo Lozano University, Carrera 4 # 22-61, Bogotá, Colombia

Journal of Globalization and Development, 2023, vol. 14, issue 1, 87-146

Abstract: This article delivers empirical evidence for the Colombian manufacturing sectors (during 1993–2012 and the subperiod 2000–2012) regarding the relationship between trade integration after the openness policy and the sector skill intensity over the skill premia, which depends on the Skill Biased Technical Change. We find that international trade reduces the positive sector skill intensity effect on wage inequality, moderately benefiting unskilled workers; however, a negative impact of the 1990 labor flexibilization on the skill premia, which increased the hiring of less expensive temporary and agency workers. Furthermore, the positive sector skill intensity impact on wage inequality is more important for trade with less developed countries than with the developed ones.

Keywords: emerging countries; international trade; labor flexibilization; manufacturing sector; skill premia; skill-biased technical change (search for similar items in EconPapers)
JEL-codes: F14 F15 F16 J31 J82 J88 O14 O33 O54 (search for similar items in EconPapers)
Date: 2023
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DOI: 10.1515/jgd-2022-0017

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