Efforts and inequality of opportunities in the Bolivian labor market

Cristian Ricardo Nogales Carvajal () and Fátima Rico Encinas
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Cristian Ricardo Nogales Carvajal: Centro de Investigaciones Económicas y Empresariales, Universidad Privada Boliviana
Fátima Rico Encinas: Centro de Investigaciones Económicas y Empresariales, Universidad Privada Boliviana

No 115, Investigación & Desarrollo from Universidad Privada Boliviana

Abstract: The equitable distribution of income and the level of human development are key differentiating characteristics of developed and developing countries. In this paper, efforts and other variables related to circumstances of individuals are quantified and simultaneously analyzed alongside traditional determinants of income in order to provide novel explanations of inequality among workers in Bolivia. Our contribution is the estimation and analysis of traditional Mincer equations combined with John Roemer’s Inequality of Opportunity approach. We find that efforts are important determinants of wage inequality in the country as well as regional development and informality. Thus we separate the portion of wage inequality that may be attributed to situations that are beyond the control of individuals and can be attributed to willingly taken decisions. Microsimulations show that it is possible to reduce inequality up to 21 percentage points if people are given chances to make similar efforts to improve their labor outcomes.

Keywords: Inequality; Quality of Life; Labor Income; Microsimulations (search for similar items in EconPapers)
JEL-codes: C10 O10 (search for similar items in EconPapers)
Pages: 10 pages
Date: 2015
New Economics Papers: this item is included in nep-dev
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Persistent link: https://EconPapers.repec.org/RePEc:iad:wpaper:0115

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