Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms

Ana Iregui, Ligia Melo Becerra () and Maria Ramirez-Giraldo

Lecturas de Economía, 2012, issue 76, 17-53

Abstract: This paper explores firms’ wage adjustment practices in the Colombian formal labor market; specifically, the timing and frequency of wage increases, as well as the link between wage and price changes. We use a survey of 1,305 firms belonging to all economic sectors. The results show that most firms adjust base wages annually, increases were concentrated around observed inflation and none of the firms cut wages. Moreover, factors associated with the performance of firms and workers alike are the main determinants of wage adjustments. The link between wages and price changes is stronger in sectors where labor costs represent a higher share of total costs and in firms operating in sectors with higher labor productivity.

Keywords: wage increases; labor market; survey evidence; logit models; Colombia (search for similar items in EconPapers)
JEL-codes: C25 D22 J30 (search for similar items in EconPapers)
Date: 2012
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Citations: View citations in EconPapers (8)

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Related works:
Journal Article: Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms (2012)
Working Paper: Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms (2011)
Working Paper: Wage Adjustment Practices and the Link between Price and Wages: Survey Evidence from Colombian Firms (2011)
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