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Labor Market Power in Developing Countries: Evidence from Colombian Plants

Francesco Amodio () and Nicolás de Roux ()

Documentos CEDE from Universidad de los Andes - CEDE

Abstract: How much can employers in low and middle-income countries suppress wages below marginal productivity? Using plant and customs data from Colombia, we exploit predetermined variation across plants in sales export destination combined with variation in exchange rates to generate plant-specific shocks to marginal revenue productivity and labor demand. We estimate a firm-level labor supply elasticity of around 2.5, implying that workers produce about 40% more than their wage level. Our results indicate that Colombian and US manufacturers have a comparable degree of labor market power

Keywords: labor market power; export; Colombia. (search for similar items in EconPapers)
JEL-codes: J42 L10 O14 O54 (search for similar items in EconPapers)
Pages: 33
Date: 2021-05-19
New Economics Papers: this item is included in nep-lma
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https://repositorio.uniandes.edu.co/bitstream/handle/1992/50042/dcede2021-27.pdf

Related works:
Working Paper: Labor Market Power in Developing Countries: Evidence from Colombian Plants (2021) Downloads
Working Paper: Labor Market Power in Developing Countries: Evidence from Colombian Plants (2021) Downloads
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Persistent link: https://EconPapers.repec.org/RePEc:col:000089:019267

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