Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96

Janine Berg and Dante Contreras
Authors registered in the RePEc Author Service: Hugo Contreras

No 2002-10, SCEPA working paper series. from Schwartz Center for Economic Policy Analysis (SCEPA), The New School

Abstract: This paper tests whether a wage curve—a negative relationship between unemployment and pay—existed in Santiago, Chile during 1957-1996. The analysis is divided into two periods corresponding to the distinct economic models in place in the country. For 1957-1973, during the period of inward-led development, we reject the existence of a wage curve. The second period, 1974-1996, corresponds to an external opening of the economy and the deregulation of publicly controlled industries and labor relations. For this period, we find a wage curve of –0.08, which is similar to the United States and other western, capitalist economies. Disaggregating the analysis for different groups of workers, we find that since the economic reforms, women's pay falls three times more than men's when unemployment doubles. Also, non-university educated and public sector workers have suffered greater pay decreases from unemployment. Workers in the informal sector do not experience a drop in pay, contradicting the notion that the informal sector acts as a buffer for unemployed formal-sector workers.

Keywords: wage curve; unemployment; inequality; Chile (search for similar items in EconPapers)
JEL-codes: J30 J60 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2002-08
New Economics Papers: this item is included in nep-lab and nep-lam
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Journal Article: Political-Economic Regime and the Wage Curve: Evidence from Chile, 1957-96 (2004)
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