The Inactive Population in Colombia and its Regional Characteristics. An Analysis from Micro Factorial Decomposition Models

Jorge Castro (), José Guillermo Ariza Estévez () and Armando Ardila Delgado ()
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José Guillermo Ariza Estévez: Universidad de los Andes
Armando Ardila Delgado: Universidad del Rosario

Lecturas de Economía, 2022, issue 96, 31-70

Abstract: This document tries to explain the differences in labor inactivity rates between each department of Colombia and the rest of the country. This differential is broken down by distinguishing between discrepancies in observable characteristics (i.e., age distribution, percentage of men and women, income, employability, etc.) and differences in unobservable characteristics (culture, traditions, etc.). For this we use a micro factorial decomposition model for nonlinear models applied to a probit model on the decision of whether or not to be inactive at work. There are 4 subgroups of departments depending on which factor most influences the definition of their labor participation. It was found that it is more common to find departments with a higher rate of inactivity attributed to unobservable factors.

Keywords: participation rate; labor market; micro factorial decomposition; regional economies; probit. (search for similar items in EconPapers)
JEL-codes: C13 J01 R10 (search for similar items in EconPapers)
Date: 2022
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DOI: 10.17533/udea.le.n96a343954

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